Europe's Insurance Body Issues Caution Regarding FIDA Suggestions
The European insurance industry, represented by Insurance Europe, has voiced its concerns about the EU's Financial Data Access (FIDA) proposal, expressing apprehensions over its complexity, potential costliness, and the risk of being counterproductive to the financial sector.
Insurance Europe's key recommendations for simplifying the FIDA proposal include:
- Limiting the scope of the proposal based on market demand, excluding reinsurance undertakings and large corporates, and extending implementation timelines across the three phases of rollout.
- Providing clear legal definitions, specifically defining the "customer" as the policyholder in insurance, and explicitly excluding sensitive personal data, commercially sensitive data, and data from suitability or appropriateness assessments from mandatory sharing. They also oppose blanket real-time data-sharing requirements.
- Ensuring a level playing field by excluding gatekeepers and third-country Financial Information Service Providers (FISPs) from accessing customer data and subjecting FISP authorization to regular review rather than one-off approval.
- Restricting mandatory data sharing to approved financial data-sharing schemes only, promoting compliance, fair compensation, and secure handling of data, while allowing voluntary sharing outside these schemes.
Insurance Europe emphasizes the need for FIDA to align with principles of simplification, proportionality, and competitiveness to avoid undue costs and complexity that could slow innovation and harm both the industry and customers.
In addition, Insurance Europe has urged policymakers to consider their recommendations to ensure the FIDA framework is focused, proportionate, and aligned with real market needs.
Beyond FIDA, Insurance Europe has also offered thoughts on the Solvency II regulations, expressing some disappointment at the position adopted by the European Parliament's Committee of Economic and Monetary Affairs. They have responded to a consultation on Regulatory Technical Standards (RTS) on the management of sustainability risks under the Solvency II framework, emphasizing that existing Solvency II requirements should be considered in the context of sustainability risk management.
There is a concern that too much cash being tied up in Solvency II could lead to a lack of investment in new staff, new ideas, and products. Insurance Europe has also commented on the EU's rejection of the UK model of reducing Solvency II cash reserves and spending it on green projects.
Europe's insurance industry, however, fully supports the European Commission's sustainability goals. Arthur Hilliard, Senior Policy Advisor at Insurance Europe, has remarked that there is still time to fix FIDA so that it is simpler and less costly.
[1] Source: Insurance Europe press release, dated [insert date]
- The European insurance industry, through Insurance Europe, has expressed concerns that the EU's Financial Data Access (FIDA) proposal may hinder innovation by being overly complex and costly, potentially hampering both the industry and its customers.
- Insurance Europe has proposed modifications to the FIDA proposal to encourage simplification, proportionality, and competitiveness, such as limiting its scope, providing clear legal definitions, ensuring a level playing field, and restricting mandatory data sharing to approved financial data-sharing schemes.
- Beyond FIDA, Insurance Europe has shared thoughts on the Solvency II regulations, advocating for a balance that avoids tying up too much cash, potentially limiting investment in new staff, ideas, and products, while still supporting the European Commission's sustainability goals.
- In a response to the European Parliament's Committee of Economic and Monetary Affairs regarding the Solvency II regulations, Insurance Europe has emphasized the importance of considering existing Solvency II requirements in the context of sustainability risk management.
