Following two extensive surveys carried out with the EU national competent authorities, EIOPA issued the results of its findings on the impact of the IDD on consumers, insurance distributors and supervisory activities.

Most notably, digitalization and the growth of new distribution models continue to present risks as well as opportunities in the eyes of national competent authorities. The main challenges arose at both application stage and at supervising the IDD rules on the form and timing of disclosures in a digital context and in applying the IDD in relation to new technologies, such as digital platforms and artificial intelligence.

Concerns were also raised on the integration of sustainability factors, risks and preferences into IDD, where the application of the new sustainability rules illustrate challenges for consumers to understand the disclosures and complex concepts introduced by the new rules.

The report also made reference to lack of guidance on the regulatory framework, including the need to provide further clarifications under what conditions a policyholder of a group insurance contract acts as an insurance intermediary. The European Commission is in fact currently working on a set of Q&A related to group insurance.

National competent authorities have also raised concerns on cross-selling practices of financial products, which can potentially cause detriment to consumers.

Author: Elaine Magri (Associate, Ganado Advocates)

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