The current wording of the proposed rules would enable people to demand the removal of their data from insurers’ databases. This would have several negative effects on the insurance market and result in higher prices.
The cost of insurance premiums in Europe could rise if the EU doesn’t make important changes to a set of data protection rules which it is currently considering, according to Insurance Europe, the European insurance and reinsurance federation.
The proposed rules would:
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Make it harder for insurers to fight fraud, because they would no longer possess or be able to process the data required to identify fraudsters. As a result, the cost of fraud – which already accounts for around 10% of all insurance claims in Europe – would continue to increase and be passed on to honest policyholders
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Stop insurers from performing their contractual obligations towards policyholders who ask for their data to be deleted, because the insurer will no longer be able to process the data they need to handle insurance claims and pay compensation
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Impede insurers in complying with other regulations which require them to process policyholder data
William Vidonja, Insurance Europe’s head of conduct of business, commented: “The European insurance industry fully supports the aims of this legislation in protecting peoples’ privacy. The legislation must also take into account the way that data is used by insurers in essential processes. It could do this by providing legal certainty to insurers who need to retain and process data for contractual and regulatory purposes, as well as for fighting fraud. If this does not happen, it will likely result in higher premiums for honest policyholders.”
Press release
© InsuranceEurope
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