InSure This month's roundup of developments affecting the insurance industry sees the General Data Protection Regulation being adopted by the EU Parliament, EIOPA publish its final report on product oversight and governance and the FCA publish case studies concerning its opt-out selling ban for add-on insurance products. General Update ► BIBA to create Insurance Brokers’ Standards Committee ► PRA speech on current regulatory issues and PRA expectations in current market conditions ► Insurance Europe briefing: Digitalisation cannot remove all barriers to cross-border insurance ► Insurance Europe paper highlights market access issues for EU (re)insurers ► Insurance Europe updates Indirect taxation booklet ► EIOPA publishes statement on internet sales of insurance and pension products ► Guiding principles for retakaful adopted by IFSB Data Protection ► General Data Protection Regulation (GDPR) adopted by EU ► Release of UK Cyber Security Annual Report ► European Commission opens consultation on e-Privacy Directive ► EU working party criticises new EU-US data protection shield ► Cold-calling firms fined by the Information Commissioner's Office (ICO) New Legislation and Consultations ► Consultations launched on secondary market for annuities ► ABI consultation on guide for simplifying language on retirement options ► Insurance Europe expresses concerns over final draft RTS on KIDs for PRIIPs ► IAIS consultation on issues paper on cyber risk to the insurance sector Regulatory Developments ► FCA case studies relating to ban on opt-out selling and improved information for add-on buyers ► EIOPA final report on product oversight and governance guidelines Solvency II ► PRA consultation on matching adjustment under Solvency II ► PRA consultation on Solvency II remuneration requirements ► Solvency II Delegated Regulation amendment ► EIOPA consultation on amendments to ITS and EIOPA guidelines ► EIOPA consultation on identification and calibration of infrastructure corporates under Solvency II ► Solvency II implementation and review interview with EIOPA Chairman ► EIOPA consults on methodology to derive the UFR and its implementation under Solvency II ► Insurance Europe raises concerns over EIOPA's consultation on UFR Enforcement/Fraud ► Insurance agent given 12-month suspended sentence for commission fraud General Update BIBA to create Insurance Brokers’ Standards Committee The British Insurance Brokers' Association (BIBA) has announced that it is in discussions with the Insurance Brokers' Standards Council (IBSC) to create a single voluntary code of conduct and guidance for insurance brokers. These discussions have already led to the creation of the BIBA Insurance Brokers’ Standards Committee. BIBA, 18 April 2016 PRA speech on current regulatory issues and PRA expectations in current market conditions The PRA has published a speech given by Chris Moulder, Director of General Insurance at the PRA on current regulatory issues and PRA expectations in current market conditions. Bank of England, PRA, 4 April 2016 Insurance Europe briefing: Digitalisation cannot remove all barriers to cross-border insurance Insurance Europe has published an insight briefing explaining that digitalisation cannot remove all barriers to increasing the volume of cross-border insurance. This is in response to the European Commission’s recent Green Paper on strengthening the internal market for retail financial services. Insurance Europe believes that the expansion of cross-border insurance within the EU should remain market-driven and it should be based on demand. Insurance Europe, 20 April 2016 Insurance Europe paper highlights market access issues for EU (re)insurers Insurance Europe has published a paper which highlights the key regulatory and market access issues that EU (re)insurance companies encounter in the United States, Brazil, Ecuador, India, Indonesia, China, Argentina and Russia. Insurance Europe, 11 April 2016 Insurance Europe updates Indirect taxation booklet Insurance Europe has updated its booklet on indirect taxation on insurance contracts in Europe. This includes a full survey of rules, tariffs and regulations within Europe as well as an overview of the taxes applicable to insurance premiums and various declaration and payment procedures in most European states. Insurance Europe, 31 March 2016 EIOPA publishes statement on internet sales of insurance and pension products EIOPA has published a feedback statement on the "Opinion on sales via the internet" of insurance and pension products which it published back in January 2015. National Competent Authorities (NCAs) were required to report to EIOPA on how they collect information on online distribution of those product and how they deal with the challenges they face in this context. The feedback statement describes some of the information received from NCAs. EIOPA, 4 April 2016 Guiding principles for retakaful adopted by IFSB The Islamic Financial Services Board has published guiding principles for retakaful (Islamic reinsurance). The Islamic Financial Services Board, 18 April 2016 Data Protection General Data Protection Regulation (GDPR) adopted by EU The European Parliament approved the GDPR on 14 April 2016, bringing the European legislative process to an end. The new laws are expected to be in force in just over 2 years, meaning that it is crucial for organisations to start preparations now. Increased rights for individuals and higher penalties mean that organisations should pay close attention to their data protection strategies. European Parliament, 14 April 2016 Release of UK Cyber Security Annual Report The UK government has published its final annual report on the UK Cyber Security Strategy, which was introduced in 2011 to help deal with the threat of cyber crime in the UK. By developing the UK's cyber security capabilities, the five year programme aims to make the UK a secure hub for cyberspace. Whilst it is difficult to measure the success of cyber security, the report states that overall, the UK's cyber security capabilities have improved and the UK has increased its share of the international cyber security market. However, cyber attacks still present a major threat to UK national security and businesses, and the government will be introducing a new strategy this year, raising its investment in cyber security to £1.9bn. The full report is available here. Cabinet Office, April 2016 European Commission opens consultation on e-Privacy Directive In light of technological developments and the incoming General Data Protection Regulation (GDPR), the European Commission has launched a public consultation on the e-Privacy Directive to seek business and stakeholder opinions on potential reform. The Commission hopes to evaluate the performance of the directive, which is aimed at protecting EU citizens' privacy rights and creating an equal playing field for companies in the market. The consultation is open for submissions now and closes on until 5 July 2016. Click here to here the commission statement. To respond to the consultation click here. European Commission, April 2016 EU working party criticises new EU-US data protection shield An EU working party has raised concerns over the new EU-US privacy shield arrangement which will replace the invalidated safe harbour regime. Whilst recognising that the privacy shield is an improvement on the safe harbour regime, the working party stressed that the limits on data collection were still broadly defined, potentially permitting mass data collection. Further, the working party echoed concerns of other privacy advocates by questioning the (lack of) independence of the US data protection ombudsman. The working group highlighted that model clauses could be used for now, pending review once the privacy shield is finalised. The full opinion is available here. European Commission, April 2016 Cold-calling firms fined by the Information Commissioner's Office (ICO) The ICO reports that two Swansea-based companies have been fined for nuisance phone calls. Falcon and Pointer was fined £175,000 following millions of automated PPI calls, including numerous calls in the early hours of the morning. Direct Choice Home Improvements was fined £50,000 for nuisance calls relating to windows, doors and conservatories. In both cases, the companies argued that they had received the telephone data from third parties. However the ICO highlighted that neither company took adequate steps to ensure that individuals had consented to providing their data. Companies must take responsibility for their marketing strategies, including taking steps to obtain data subject consent. It is insufficient to rely on third party assurances without carrying out proper due diligence. A recent update to the ICO's Direct Marketing guidance is available here. ICO, 24 March 2016 New Legislation and Consultations Consultations launched on secondary market for annuities HM Treasury has published a consultation document on the draft legislation the government intends to introduce as part of the implementation of a secondary market for annuities, specifically to create three new specified activities in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) that will apply to any person wishing to operate in the new secondary market for annuities. HMRC has also published Creating a secondary annuity market: tax framework, a consultation document outlining a proposed tax structure for the secondary annuity market which is due to come into effect from 6 April 2017. Finally, the FCA has published a consultation paper setting out its proposed rules and guidance for the secondary annuity market. HM Treasury / HMRC / FCA, 21 April 2016 ABI consultation on guide for simplifying language on retirement options The Association of British Insurers has published a consultation seeking views on a draft guide that simplifies language on retirement options. The consultation runs until 19 June 2016. ABI, April 2016 Insurance Europe expresses concerns over final draft RTS on KIDs for PRIIPs Insurance Europe has expressed concerns over the final draft regulatory technical standards (RTS) on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs). It highlights that under the current draft, customers may be led to believe that insurance-based investment products are more expensive and more risky than they truly are. Insurance Europe, 8 April 2016 IAIS consultation on issues paper on cyber risk to the insurance sector The International Association of Insurance Supervisors has published a draft issues paper for consultation on cyber risk to the insurance sector. Comments are required by 13 May 2016. IAIS, 14 April 2016 Regulatory Developments FCA case studies relating to ban on opt-out selling and improved information for add-on buyers The FCA has published case studies to help firms understand its expectations under the new rules and guidance that it confirmed in its policy statement (PS15/22) on general insurance add-ons. FCA, 31 March 2016 EIOPA final report on product oversight and governance guidelines EIOPA has published a final report following its consultation on preparatory guidelines on product oversight and governance arrangements by insurance undertakings and insurance distributors. The report should be read in the context of the new rules under the Insurance Distribution Directive (EU/2016/97) (IDD). It is not binding on insurers but it aims to provide guidance to National Competent Authorities as they prepare in implement the IDD, which will come into force in February 2018. EIOPA, 6 April 2016 Solvency II PRA consultation on matching adjustment under Solvency II The PRA has published a consultation (CP16/16) seeking feedback on a draft supervisory statement concerning the application of the matching adjustment (MA) for the purposes of calculating technical provisions under the Solvency II Directive, including in the context of applications for MA approval and the ongoing management of MA portfolios. The consultation runs until 15 July 2016. Bank of England, PRA, April 2016 PRA consultation on Solvency II remuneration requirements The PRA has published a consultation on a proposed draft supervisory statement concerning Solvency II remuneration requirements. Responses are due by 2 June 2016. Bank of England, 7 April 2016 Solvency II Delegated Regulation amendment The Commission Delegated Regulation ((EU) 2016/467), amending the Solvency II Delegated Regulation concerning the calculation of regulatory capital requirements for several categories of assets held by insurance and reinsurance undertakings, has been published in the Official Journal. European Commission, 1 April 2016 EIOPA consultation on amendments to ITS and EIOPA guidelines Following the amendment to Delegated Regulation ((EU) 2015/35), EIOPA has published a consultation on a proposal to amend (i) Implementing Technical Standards on the templates for submitting information to supervisory authorities, and to (ii) EIOPA's guidelines on reporting and public disclosure. EIOPA, 5 April 2016 EIOPA consultation on identification and calibration of infrastructure corporates under Solvency II EIOPA has published a consultation (CP-16-005) on the identification and calibration of the "other infrastructure investment risk" categories (i.e infrastructure corporates) under the Solvency II Directive. The consultation runs until 16 May 2016. EIOPA, 15 April 2016 Solvency II implementation and review interview with EIOPA Chairman EIOPA has published a two part interview with Gabriel Bernardino, EIOPA Chairman, on the implementation and review of the Solvency II Directive. Part one - "Supervisors shouldn't kick the can down the road on low rates" Part two - "We will see if a countercyclical requirement makes sense for insurers" EIOPA, 11 April 2016 EIOPA consults on methodology to derive the UFR and its implementation under Solvency II EIOPA has published a consultation on the methodology to derive the ultimate forward rate (UFR) and its implementation under the Solvency II Directive. EIOPA, 6 April 2016 Insurance Europe raises concerns over EIOPA's consultation on UFR Insurance Europe has expressed concerns of a misunderstanding in relation to EIOPA's recent consultation on the ultimate forward rate (UFR) under the Solvency II Directive. Insurance Europe points out that some observers seem to confuse the UFR with the discount rate. Insurance Europe, 21 April 2016 Enforcement / Fraud Insurance agent given 12-month suspended sentence for commission fraud The City of London Police has reported that an insurance agent who sold fictitious insurance policies to profit from the commission fees has been given a 12-month sentence, suspended for two years. The defendant was ordered to carry out 120 hours of unpaid work and pay £6,590 in compensation. City of London Police, 5 April 2016
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InSure - April 2016
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