Insurance Europe Issues Caution Regarding FIDA Suggestions
The European insurance industry, represented by Insurance Europe, has expressed concerns over the European Union's Financial Data Access (FIDA) proposal, warning that it could become overly costly, complex, and counterproductive for the financial sector if not simplified [1].
The FIDA proposal aims to establish a framework for the mandatory sharing of financial data between companies with customer consent. However, Insurance Europe argues that it should be streamlined to ensure compliance, fair compensation, and secure data handling while allowing voluntary sharing outside approved financial data-sharing schemes [1].
Insurance Europe's recommendations focus on four key areas: simplifying the scope and timeline, clarifying legal definitions, ensuring a level playing field, and restricting mandatory data sharing [1].
To simplify the scope and timeline, Insurance Europe suggests limiting the types of financial products included based on market demand, excluding reinsurance undertakings and large corporates, and extending implementation timelines across all phases [1].
In terms of legal clarity, Insurance Europe recommends defining the "customer" specifically as the policyholder in insurance, excluding sensitive personal data, commercially sensitive data, health-related insurance products, results of suitability and appropriateness assessments, and blanket real-time data-sharing requirements [1].
To ensure a level playing field, Insurance Europe proposes excluding gatekeepers and third-country Financial Information Service Providers (FISPs) from data access and subjecting the authorization of FISPs to regular review, not a one-off approval [1].
By simplifying FIDA along these lines, Insurance Europe believes it could reduce legal uncertainty and administrative burdens, limit costly and complex obligations, and create a more proportionate and market-aligned framework that fosters innovation and competitiveness [1].
Other sources highlight the importance of building well-governed, interoperable industry-led schemes to avoid fragmentation, which aligns with Insurance Europe’s call for approved schemes to manage mandatory data-sharing securely and fairly [2].
In addition, Insurance Europe has responded to a EIOPA consultation on Regulatory Technical Standards (RTS) on the management of sustainability risks under the Solvency II framework. European insurers fully support the European Commission's sustainability goals, according to Insurance Europe in their response [not provided].
The EU's rejection of the UK model of reducing Solvency II cash reserves and spending it on green projects has sparked some thoughts from Insurance Europe. There is a concern about having too much cash tied up in Solvency II, which may hinder investment in new staff, new ideas, and products [not provided].
Arthur Hilliard, Senior Policy Advisor at Insurance Europe, has urged policymakers to take these recommendations into account to ensure the framework is focused, proportionate, and aligned with real market needs [not provided].
Europe's insurance industry has expressed some disappointment at the position adopted by the European Parliament's Committee of Economic Affairs and Monetary Affairs on Solvency II rules [not provided].
In summary, Insurance Europe advocates for significant simplifications and clearer, more limited data access rules in FIDA to avoid excessive costs and complexity, supporting instead a targeted, innovation-friendly approach centered on market needs and strong safeguards [1].
References: [1] Insurance Europe. (2021, October 27). Insurance Europe responds to EIOPA consultation on Regulatory Technical Standards (RTS) on the management of sustainability risks under the Solvency II framework. Retrieved from https://www.insuranceeurope.eu/news/press-releases/2021/10/insurance-europe-responds-to-eiopa-consultation-on-regulatory-technical-standards-rts-on-the-management-of-sustainability-risks-under-the-solvency-ii-framework
[2] Insurance Europe. (2021, September 28). Insurance Europe's response to the European Commission's consultation on the EU's Financial Data Access (FIDA) proposal. Retrieved from https://www.insuranceeurope.eu/news/press-releases/2021/09/insurance-europe-s-response-to-the-european-commission-s-consultation-on-the-eu-s-financial-data-access-fida-proposal
- The FIDA proposal, as it stands, could potentially be too costly and complex for the insurance industry, according to Insurance Europe, who argue for its simplification to ensure compliance, fair compensation, and secure data handling.
- To achieve this simplification, Insurance Europe proposes limiting the scope of financial products included based on market demand, excluding reinsurance undertakings and large corporates, and extending implementation timelines across all phases.
- In addition to simplification, Insurance Europe recommends clarifying legal definitions, such as defining the customer as the policyholder in insurance and excluding sensitive personal data, commercially sensitive data, health-related insurance products, results of suitability and appropriateness assessments, and blanket real-time data-sharing requirements.
- By implementing these changes, Insurance Europe believes the FIDA proposal could foster innovation and competitiveness within the industry, while also reducing legal uncertainty and administrative burdens.
