EIOPA Coronavirus Update on ConsumersApril 2020At the start of this month, the European Insurance and Occupational Pensions Authority (EIOPA) issued a statement to insurers and intermediaries, urging them to take steps to mitigate the impact of Coronavirus/COVID-19 on consumers. Read the EIOPA Call to Action HERE.
EIOPA has said that it welcomes initiatives already taken by insurers and intermediaries in recognition of the particular circumstances that consumers find themselves and which may prevent consumers from fulfilling contractual obligations.
- Access to and continuity of insurance services should be considered essential in the context of the outbreak.
- Insurers and intermediaries are asked to:
- Provide clear and timely information to consumers on contractual rights;
- Treat consumers fairly and be explicit in all communications;
- Inform consumers about contingency measures taken;
- Continue applying product oversight and governance requirements and, where necessary, carry out a product review; and
- Consider the interests of consumers and exercise flexibility in how they are treated, where reasonable and practicable.
However, EIOPA has warned against unfair treatment of consumers as a result of disruption to the market, stating that this represents a risk to the entire sector.
With this statement, EIOPA specifically asks insurers and intermediaries to consider a number of different actions, taking into account developments relating to the Coronavirus/COVID-19 outbreak.
Whilst highlighting the need for flexibility in the interest of consumers and for their continued fair treatment, EIOPA also highlights that imposing retroactive coverage of claims not envisaged within contracts could create material solvency risks and ultimately threaten policyholder protection.
- Providing clear and timely information to consumers;
- Keeping consumers informed about contingency measures that have been put in place;
- Continuing to apply product oversight and governance requirements; and
- Exercising flexibility in the treatment of consumers where reasonable and practical.
This call to action follows the publication of a statement on actions to mitigate the impact of Coronavirus/COVID-19 on the EU insurance sector (click HERE to read); and Recommendations on supervisory flexibility regarding deadlines of supervisory reporting and public disclosure by insurers (click HERE to read).
By Judy de Castro - Regulatory Consultant