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Today, the European Insurance and Occupational Pensions Authority (EIOPA) has issued a statement calling on insurance companies to review their product oversight and governance measures because of the potential impact the COVID-19 pandemic can have on products and their utility for customers. It is vitally important that insurance companies place the fair treatment of customers at the heart of their response to the COVID-19 pandemic.
Insurance manufacturers are asked to identify products whose main features, risk coverage or guarantees have been materially affected by the COVID-19 pandemic. If such products no longer offer value to the target market, insurers should assess whether there is the risk of possible unfair treatment. The assessment should be on a medium to longer term basis, to take into account product lifecycles and the evolution of the impacts of the COVID-19 pandemic.
Where there is a possibility of unfair treatment, EIOPA expects remedial measures to be taken. These measures should be proportionate to potential unfair treatment and take account of legal requirements in national civil and insurance law.
In taking remedial measures, insurance manufacturers should aim at both mitigating the situation and preventing further occurrences of detriment. Insurance manufacturers should consider a broad range of possible measures and their impact on products over the medium to long term.
This call to action is one of a series of measures that EIOPA has been taking to address the impact of COVID-19 on the insurance sector and in particular builds on its statement of 1 April 2020 calling on insurers and intermediaries to take steps to mitigate the impact of COVID-19 on consumers.
EIOPA and national supervisory authorities will continue to work collectively to ensure financial stability, market integrity and consumer protection, including by monitoring market practices in light of the COVID-19 situation.