Insurance Europe has called the European Commission’s legislative proposal on financial data access only a ‘partial success’. In response to a European Commission consultation, the federation of insurance associations shared its position paper which sets out how to improve the proposal and ensure it is coherent with other EU rules. The open finance proposal, which aims to establish an EU framework for managing business and personal data in the financial services sector, has the potential to ‘positively impact both consumers and insurers’ yet ‘the socio-economic costs do not match the benefits of the proposal’ Insurance Europe argues.

In its position paper released today, Insurance Europe shared its views which, among others, include:

Scope: Insurance Europe is concerned that the proposal has such a wide scope. Instead, it calls for a step-by-step approach that looks at specific uses to see where there could be a clear benefit for consumers.

Sensitive data: While exemptions are envisaged, the proposal is not clear on whether certain categories of sensitive personal data under the GDPR would fall under the data-sharing obligations. Insurers process different kinds of personal data such as medical/health data and data concerning possible fraud, which should not fall within the scope of FIDA.

Retail framework FIDA should focus only on a retail framework and should exclude commercial customers. This would align the proposed framework more with the GDPR and data portability rights for customers.

Proprietary data Insurers should not be obliged to share trade secrets, business-sensitive information or proprietary data that they have generated.

Access to data The European insurance industry welcomes an approach that seeks to ensure fair and equal access to data based on a true level playing field. It notes some areas where a true level playing field have not been respected in the proposal or where it creates some inconsistencies with the Data Act.

Costs There needs to be a more adequate focus on the upfront infrastructure investment by financial entities, as compensation on the basis of each individual data sharing request is highly dependent on a strong interest and demand from customers.

Cross-sectoral data-sharing While the proposed FIDA framework targets data sharing within the financial sector, Insurance Europe wishes to stress its disappointment that the framework fails to embrace the clear added value of enabling cross-sectoral data sharing for financial institutions.

Timeline The timeline of 18 months for the operational development of financial data sharing schemes is not very realistic and could prove extremely challenging in many markets, especially given how wide the proposed scope is.