Europe's Insurance Sector Issues Alert Over FIDA Recommendations
The insurance industry in Europe has expressed concerns about the complexity, costliness, and potential counterproductiveness of the EU's Financial Data Access (FIDA) proposal. In response, Insurance Europe, a federation representing insurance and reinsurance companies, has proposed four key measures to simplify the framework.
The first recommendation is to narrow the scope and extend timelines. By limiting the range of financial products in scope based on market demand, and excluding reinsurance undertakings and large corporates, Insurance Europe aims to make the implementation more manageable.
The second recommendation is to provide greater legal clarity. The federation suggests defining the "customer" explicitly as the policyholder in insurance, and excluding sensitive personal data, commercially sensitive data, products involving health data, results of suitability and appropriateness assessments, and any blanket real-time data-sharing requirements.
Thirdly, Insurance Europe recommends ensuring a level playing field. The federation suggests excluding gatekeepers and third-country Financial Information Service Providers (FISPs) from accessing customer data. They also propose making authorization of FISPs subject to regular review, rather than one-off approvals.
Lastly, Insurance Europe recommends restricting mandatory data-sharing to approved schemes. This measure aims to ensure compliance, fair compensation, and secure handling of data, while allowing voluntary data sharing outside these schemes.
Arthur Hilliard, Senior Policy Advisor at Insurance Europe, emphasized the need for smart, innovation-fueling rules that do not slow down progress with costly obligations. These recommendations aim to make FIDA more focused, proportionate, and aligned with real market needs while protecting customer data and ensuring fair competition.
The EU's Financial Data Access proposal aims to create a framework for mandatory sharing of financial data between companies with customer consent. However, concerns about potential governance uncertainty, fragmentation risks, and the challenge of compensation models could delay benefits or create uneven implementation across the EU. Insurance Europe’s views aim to ensure FIDA supports innovation and customer interests without imposing excessive burdens on the insurance sector.
In a separate development, the EU has rejected the UK model of reducing Solvency II cash reserves and spending it on green projects. Insurance Europe emphasizes the importance of existing Solvency II requirements in managing sustainability risks. The federation has also responded to a EIOPA consultation on Regulatory Technical Standards (RTS) on the management of sustainability risks under the Solvency II framework.
However, the specific details of Insurance Europe's response to the EIOPA consultation, as well as the potential consequences of the FIDA proposal becoming "overly costly, complex and counterproductive," are not provided in the text. The federation urges policymakers to take its four recommendations on board to ensure the framework is focused, proportionate, and aligned with real market needs.
[1] Source: Insurance Europe's press release on their response to the FIDA proposal [2] Source: Insurance Europe's press release on their concerns about the FIDA proposal and their recommendations
- Insurance Europe has proposed four key measures to simplify the European Union's Financial Data Access (FIDA) proposal, aiming to make it more manageable by narrowing the scope and extending timelines, providing greater legal clarity, ensuring a level playing field, and restricting mandatory data-sharing to approved schemes.
- Arthur Hilliard, Senior Policy Advisor at Insurance Europe, emphasized the need for regulations that foster innovation without slowing progress with costly obligations, stating these recommendations are designed to make FIDA more focused, proportionate, and aligned with real market needs while protecting customer data and ensuring fair competition.
- The EU's FIDA proposal seeks to create a mandatory framework for sharing financial data between companies with customer consent, but concerns have been raised about governance uncertainty, fragmentation risks, and the challenge of compensation models.
- Insurance Europe has also responded to a European Insurance and Occupational Pensions Authority (EIOPA) consultation on Regulatory Technical Standards (RTS) on the management of sustainability risks under the Solvency II framework. However, the specific details of their response and the potential consequences of the FIDA proposal becoming "overly costly, complex, and counterproductive" are not provided in the text.
- The federation urges policymakers to take their four recommendations on board to ensure the framework is focused, proportionate, and aligned with real market needs, advocating for innovation in the insurance industry while protecting customer interests.
