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29 January 2016

Insurance Europe: Response provided on preparatory POG guidelines

While it supports effective product oversight and governance arrangements, Insurance Europe has urged the EIOPA not to pre-empt the outcome of EU law and to await the Insurance Distribution Directive delegated acts on POG to assess whether there is a need for guidelines in this area.

Guidelines serve the purpose of harmonising the supervision and application of Union law. They should therefore only be applied where they are required to fulfil this purpose and where they ensure consistent implementation and application of the provisions stipulated by EU law. Preparatory guidelines pre-empt the political discussions on Level 2 and limit the scope of discretion of the EC for Level 2 measures. The EIOPA Regulation does not provide for such anticipatory or preparatory guidelines. On the contrary, according to recital 25 of the EIOPA Regulation, the authority does not have the power to issue guidelines in areas covered by technical standards.

With regard to the scope of this consultation paper, EIOPA invites respondents to focus their comments on the proposed guidelines for insurance distributors only, which are outlined in Chapter 2. However, Insurance Europe’s submission to the consultation also contains certain points that are relevant for manufacturers, which it believes are paramount to the discussion on product oversight and governance (POG) arrangements.

In addition, the guidelines for distributors contained in Chapter 2 go beyond the requirements set out for distributors in Article 25 of the Level 1 Insurance Distribution Directive (IDD) text, which simply provides that distributors must have in place adequate arrangements to obtain information on the product and the product approval process, including the identified target market of the insurance product. The proposed guidelines go beyond the Level 1 text by introducing further requirements for distributors, including on the role of management and documentation requirements.

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