Insurance Europe: Consumer Credit Directive: Including right to be forgotten for persons with prior diagnosis would be bad for consumers
14 September 2022
To avoid unforeseen negative consequences for consumers, the implementation of any RTBF at EU level should be via a flexible code of conduct.
A new Insurance Europe paper
setting out the sector’s key messages on the ongoing review of the
Consumer Credit Directive (CCD) outlines why the introduction of a right
to be forgotten for persons with a prior diagnosis of certain
communicable and non-communicable diseases, including cancer, would have
significant negative impacts on consumers and their insurers.
This
follows the European Parliament’s amendments to the CCD legislative
proposal that would require member states to draw up a list of
communicable and non-communicable diseases in order to introduce a
10-year right to be forgotten (RTBF) for adults (five years if diagnosed
before the age of 18). The RTBF would mean they would not be required
to disclose a prior diagnosis of any disease on that list to an insurer.
Were this to be adopted in the final CCD, insurers foresee:
- Reduced access to insurance protection for all consumers
- An RTBF can have a detrimental impact on tariffs. There is,
therefore, a risk that average premiums would increase and/or cover
would diminish for all consumers due to the uncertainty about
potentially higher risks for insurers.
- Increased risk of consumer detriment
- The risks are particularly high due to the European Parliament’s
intention to apply an RTBF to a broad list of communicable and
non-communicable diseases, rather than limiting it to cancer. The
absence of any limitation to the RTBF to specific insurance products,
for example only life insurance, means there could be unforeseen
consequences for certain consumer groups and/or types of insurance
products.
- Disappearance of some products - In the longer
term, some products may become commercially unviable or unattractive to
consumers, creating the risk of underinsurance in more vulnerable
sections of the population.
- Uncertainty for consumers -
Including multiple diseases will require complex medical terminology to
define each of them. This could make it extremely difficult for
customers to know whether they should disclose a prior diagnosis. This
could lead to significant claims uncertainty because non-disclosure of
material facts could lead to the insurance coverage becoming void.
- Opaque system
- The diseases concerned would be included on a national list based on
expert views rather than scientific, statistical and medical data that
can objectively show the risk of the insured event happening and
therefore the viability of adding a disease to the list.
- Less certainty about insurers’ ability to pay future claims
- Without information about the risks insured, insurers will find it
difficult to meet their regulatory obligations and build adequate
reserves to pay future claims, as they will not have the full
information on possible future claims coming through their books.
To
avoid unforeseen negative consequences for consumers, the
implementation of any RTBF at EU level should be via a flexible code of
conduct. This should be agreed to by all stakeholders, put scientific,
medical and statistical data at its centre, and be able to be smoothly
adapted to scientific developments. Insurance Europe, therefore, advises
against a rigid mechanism embedded in EU legislation that is hard to
adapt.
Insurance Europe also strongly welcomes the recent
assurance given by EU Commissioner Mairead McGuinness that the European
Commission will gather more evidence and encourage dialogue between
national authorities, patients and the financial sector during the
drafting of the EU code of conduct on fair access by cancer survivors to
financial services.
Paper
Insurance Europe
© InsuranceEurope
