03 September 2012

Insurance Europe key messages on the European Commission's proposed General Data Protection Regulation

Insurers are concerned that the EC proposed Regulation will restrict insurers’ ability to process and use data to assess risk properly. Collecting and processing personal data are at the core of insurance business. Being able to access and process personal data through automated processing enables insurers to process and pay claims, determine the level of cover needed, assess the risk and hence provide consumers with the appropriate premium that fairly reflects the individuals’ needs and risks.

If insurers are not able to assess risks properly, there will be a significant negative impact on consumers. For example, it would prevent or delay the reimbursement of medical treatment or the compensation for car accidents, as without an appropriate assessment of the risks, insurers are unable to determine the right amounts of reimbursement or compensation. Further potential negative consequences include the increase of premiums, decrease in insurance coverage and the fact that some products may be withdrawn entirely from the market.

Furthermore, Insurance Europe believes that parts of the proposal have been designed with the intention to address problems stemming from social networking, online tracking and search engine technology. These parts should not apply to other highly regulated fields of activities, to which they are not adapted, such as insurance.

Therefore, any changes to the EU data protection legislation should be relevant and proportionate, balancing the individuals’ privacy right with data security, taking into consideration the way insurance works. It explicitly should recognise the need for insurers and reinsurers to process personal data in order to calculate fair premiums, and respect contract law requirements. It should also enable insurers to verify the accuracy of information provided and prevent fraud and other financial crime.

Finally, the Regulation must not overlap or be in conflict with other pieces of national or EU legislation, such as the Solvency II Framework Directive and the Anti-money laundering Directive.

Position paper

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