The 4th edition of the European Consumer Protection Conference: Main conclusions

22 March 2018 — Alexandru CIUNCAN
The European Consumer Protection Conference, taking place on Thursday, 22 March, in Prague, brought into debate the consumer environment in the current European regulatory and economic landscape, the upcoming legislative changes that will benefit consumers and users of insurance and private pension products, as well as digitalization and the impact of technological advances in the field of financial services.

The list of speakers included well-known insurance professionals, representing organizations, associations and companies from over 10 countries.

The participants had the opportunity to discover how to prepare for the future European regulatory changes, get in touch with the new emerging technologies and their impact on consumers, find out the latest trends in financial services, share relevant experiences in consumer protection and benefit from the successful insurance professionals' experience in improving consumer protection and satisfaction.

The 4th edition of the European Consumer Protection Conference was supported by IIS - International Insurance Society, as Supporting Organization, VIG and EUROINS as Main Partners and it was organized by XPRIMM Publications with the support of RECREX. More details are available here.

Katja WUERTZ - Head of Consumer Protection Department, EIOPA

- Conduct of business is about how undertakings do business, how they design products and market them. However, much remains still to be done in this regard.
- On the regulatory side, there is nothing less than a revolution in recent years: Solvency II, IDD and PRIPPs. For now, the policy design work has mostly been completed. We strive now for convergence in implementation and interpretation. We will continue to put significant resources in working together with our members, national competent authorities.
- We are now therefore moving from regulation to supervision.
- Supervisory capacities really still need to be build. There needs to be much greater transparency from a conduct risk. EIOPA will support its members in this direction, amongst others.
- The real impact of conduct risk on consumers can be life-changing in a negative way. We should always keep this in mind.

Michael THEILMEIER - Senior Vicepresident, Gen Re Germany

- IDD & Data protection specific legislation represents a huge change in the insurance landscape
- Germany is the first EU member state that fully implemented the Insurance Distribution Directive, but there were lengthy discussions between various stakeholders on the market

William VIDONJA - Head of Conduct of Business, Insurance Europe

- PRIIPs KIS was implemented since the beginning of 2018. Each customer will be presented with a Key Information Document that had the purpose of informing the customers. So far, we have very little experience and only initial impressions.
- All these new pieces of regulation should not be taken individually as most of the times there are overlaps. Overlaps between the PRIIPs KID and other regulation such as UCITS may happen.
- We hope that EC and the ESAs will take into consideration the feedback from the PRIIPs KID during the review of the PRIIPs Regulation
- The IDD is raising questions for the future, such as the risk of information overload for consumers or the compatibility with the digitalisation of distribution.
- Also, currently there are several regulatory projects in the pipeline such as the EC FinTech Action Plan, GDPR, PEPP Regulation or the consumer redress proposal etc.

Derville ROWLAND - Director General (Financial Conduct), Central Bank of Ireland

- Globally, banks' misconduct costs have reached 320 billion USD - this gives you an idea about the size
- One thing we can agree on is the degree and pace of change that can produce positive outcomes for consumers
- The financial crisis had an important impact on a small and open economy such as Ireland. But we have learned a lot of lessons from the crisis
- Consumers are best protected in a stable financial system where their interests are at the core of the thinking
- In our work, we recognise that consumer operate in an international connected world, therefore we participate to all major international bodies such as EIOPA, EBA, the OECD etc.
- In 2006, the Central Bank of Ireland published a Consumer Protection Code, which set out how financial products should be sold. This was complemented with a Minimum Competency Code which set out minimum professional standards for service providers
- Is the industry really living up to its promise of putting consumers at the heart of its business?

Mirenchu DEL VALLE - Secretary General, Association of Spanish Insurers

- We are now in an intense and interesting moment regarding consumer protection in Europe
- Spanish insurers are, starting 1 January 2018, compliant with the PRIIPs Key Information Document. But in the revision that the EC will carry out the specificities of the insurance business
- Currently, Spain is in the process of implementing the Insurance Distribution Directive to the national law. However, is it not certain if the law will be transposed before 1 January 2019. We need at least 3 months between the approval of the law and its implementation.
- But Spanish insurers are implementing above and beyond the requirements of IDD - basically self-regulating itself through a dedicated Guide. Over 70% of the Spanish insurance markets has already adhered to this guide.
- Other projects and campaigns developed by UNESPA address the topic of financial education, language simplification, all for the benefit of improving communication between consumers and the industry.

Matti LEPPALA - Secretary General / CEO, PensionsEurope

- Personal pensions across Europe is a very diversified field, as is taxation of pension contributions
- There are numerous sustainability issues of public pensions systems everywhere so the need to supplemental pensions is great, but depends of national specificities
- The Pan-European Personal Pensions initiative can solve a real problem by increasing the retirement savings in the EU. This should create more savings and not simply transfer funds from different other national pillars such as occupational pensions or other personal pensions schemes
- PEPP will be issued under the form of a Regulation, so it will be directly applicable to European Union member states

Calin RANGU - Director, ASF - Financial Supervision Authority

- The objectives of business conduct strategy are: reducing the consumer detriment by a more efficient consumer protection; ensuring fair treatment and protecting the right of consumers and beyond
- Operational risks (generated by people plus those stemming out from management of the systems) are among the most important risks that affect consumers, hence they should be managed correctly. So, we have a special focus on this category
- Supervision tools employed in conduct of business supervision may include permanent and periodic supervision or ad hoc, thematic surveillance, mystery shopping, risks assessments etc.
- It will take around 2-3 years for the Insurance Distribution Directive to be fully and truly applied

Aysun Yildiz OZER - Deputy Secretary General, Turkish Insurance Association

- We have 63 insurance companies in Turkey, all members of the TSB, by law
- 13,1 billion USD Gross Written Premiums in 2017, up 14% in comparison with 11,5 billion. The insurance penetration rate is 1,6% and the insurance density is 165 USD per person. Insurance represents 4% of the financial system, as opposed to banks that have 87%.
- The Consumer Protection Act changed the overall scenery of the Turkish insurance market. One of the consequences was an increase in operational costs for the companies.
- CPA is not compatible with digital insurance, as it mentioned the written/signed consent of the policyholder (no digital signatures). It also required insurance companies to issue a printed and signed copy of the policy
- Another important law is the Protection of Personal Data which was enacted in 2016. Insurance companies demanded exemption from the regulation for health data.
- Alongside CPA, the Protection of Personal Data legislation is not allowing distance sales, hence restraining development potential although they protect policy holders.

Ermin CENGIC - Secretary general, Association of Insurance Companies in the Federation of Bosnia and Herzegovina

- There is an awareness of need to align with EU legal regulation, especially in those insurance companies whose "mothers" are already in the EU (Austria, Slovenia, Croatia).
- On the other hand, there is also the awareness that the insurance market is at a very low level of development. It seems that insurers are dealing with issue of applying the new law on insurance (in Federation of B&H) and with greater capital requirements, and especially preparation for the process of liberalisation of MTPLI market (which takes 60% of the non-life premium on the B&H level and even a bigger percentage on the entity levels).

Klime POPOSKI - President, Insurance Supervision Agency, Macedonia

- We have strong political will in order to join the EU in Macedonia, but we are not in a hurry, for various reasons
- In terms of insurance regulation, in Macedonia the Government and the regulators are very much inclined to follow the EU legislation. In the last 2 years, we successfully managed to do the preparation for Solvency II.

Janis ABASINS - President, Latvian Insurers' Association

- When it comes to Solvency II, companies that are prudent in reserving and in doing the actuarial calculation have had no issues. The other undertakings definitely had some work to do
- In Latvia, we did not have any implementation issues in what Solvency II is concerned
- Solvency II is not the worst "enemy" in comparison with IDD, in example.

Hrvoje PAUKOVIC - Director, Croatian Insurance Bureau

- The implementation of Solvency II in Croatia has brought a number of benefits to the industry, including the professionalisation of those working in insurance undertakings
- EU legislation pushed insurance companies to improve, to become more efficient, to reduce costs etc.

Desislav DANOV - Head of Organization, Insuretech Sofia

- We are now facing 3 major issues that somehow came at the same time: Solvency II, IDD and GDPR
- In Bulgaria, our troubles with Solvency II have just started, in my opinion
- Small countries like Bulgaria were not involved in the development of the legislative framework of Solvency II. This was designed for big players which Bulgaria is lacking
- IDD is making life for intermediary very complicated.

Alexandru CIUNCAN - Member of IRSG & OPSG of EIOPA

- Conduct of business supervision legislation is here for a purpose. It all started with mis-selling practices promoted by the insurance industry, such as PPI-Payment Protection Insurance in the UK or Mobile Phone insurance. It is the industry who has to take responsibility for its actions
- Claims handling is still a major source of consumer detriment, especially in Central and Eastern European markets
- According to the EIOPA Consumer Trends Report, the number of petitions at EU level increased by 31% year on year. Something had to be done.

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