Following the European Insurance and Occupational Pensions Authority’s (EIOPA) opinion on 21 December 2017 on service continuity in light of the UK’s decision to leave the European Union (Brexit), EIOPA has published a further opinion on 28 June 2018 on the disclosure of information to customers on the impact of Brexit (EIOPA Opinion).
In its 21 December 2017 opinion EIOPA advised insurance undertakings to take adequate steps in order to ensure service continuity in relation to contracts concluded prior to the UK’s withdrawal date. The aim of the EIOPA Opinion is to remind national supervisory authorities about the duty of insurance entities to inform their customers about the possible impact of Brexit on their contracts and of the relevant contingency measures taken by them. EIOPA advises insurance entities to provide clear and non-misleading information on the contingency measures taken or planned by them, including where no measures have been taken and the reasons for this.
The EIOPA Opinion is addressed to national supervisory authorities, which are required to monitor whether insurance entities are fulfilling their obligations, and concerns contracts between the UK and the rest of the European Union.
EIOPA considers that insurance entities (particularly insurance undertakings) need to provide customers with a range of information in order to enable customers to make an informed decision before concluding or renewing a contract. Some examples of possible impacts that insurance entities (and their distribution channels) would be required to inform their customers of are:
- change of the contractual counterparty or the validity of insurance contracts
- change or loss of protection provided by any existing national compensation scheme
- change to tax implications
- change to the claims management procedure or to other customer services
- change of the applicable law
There is an expectation that customers be informed of any changes in “due time" so that they can make an informed decision during inception and renewals. EIOPA has extended its opinion to cover contractual counterparties as well as “beneficiaries", which would include any person who is entitled to a right under an insurance contract.
Together with national supervisory authorities, EIOPA will monitor how customers are informed about Brexit by working with national supervisory authorities and it expects national supervisory authorities to provide it with the necessary information to monitor developments in this area.