Selected recent European Insurance news items of more general interest:
"New life insurance products" and "Big data and consumer analytics" are two of the developments noted in the "EIOPA Fifth Consumer Trends Report" published on 16 December. EIOPA notes the following in this particular respect:
- new life insurance products with reduced or no guarantees, sometimes with a high degree of complexity, continue to be introduced into the market
- big data and consumer analytics in motor insurance (black boxes), life and health insurance (wearable technology) and household insurance (geo-coding and connected houses), allow the accuracy of risk assessments to be improved and the development of more tailored products, ...
Whilst aware of the benefits that can be brought about by developments, EIOPA's Chair said "EIOPA is following very closely the potential threats for consumers such as the availability and affordability of insurance for some consumers." This concern was also flagged by the FCA's Chief Executive last month.
On 15 December the House of Commons Library published a briefing paper "Brexit and data protection" which discusses the current reform of EU data protection law, the interaction with UK law, and the potential consequences of Brexit in this area. The UK must apply the General Data Protection Regulation, which is now in force, by 25 May 2018.
The House of Lords' EU Financial Affairs Sub-Committee has completed its inquiry into the potential impact of Brexit on the financial services sector. On 15 December, they published their report "Brexit: financial services" for debate and their conclusions include the importance of agreeing a transitional period for financial services and the possible need to seek a deal to bolster the current equivalence arrangements.
On 12 December, EIOPA published the "Final Report on the proposal for Guidelines on facilitating an effective dialogue between competent authorities supervising insurance undertakings and statutory auditor(s) and the audit firm(s) carrying out the statutory audit of those undertakings". The scope of the Guidelines is defined by the scope of the Audit Regulation, which refers to the statutory audit of the annual and consolidated financial statements. It is noted that "it is simply out of the scope of the Guidelines to firmly regulate the communication with the supervised insurance undertaking." (Background information) The Solvency II Directive sets out legal requirements on statutory auditors to report promptly any facts which are likely to have a serious effect on the financial situation or the administrative organisation of an insurance or a reinsurance undertaking. However, facilitating such effective dialogue (as required by the Audit Regulation) is outside the scope of the Directive.
The ESAs have published their "Report on automation in financial advice." Following responses to last year's discussion paper, they have arrived at a number of conclusions (including possibly overstating automation benefits) but broadly will continue to monitor the situation.
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