The European Insurance and Occupational Pensions Authority (EIOPA) published on Thursday 22 September two supervisory statements on the exclusions of certain systemic risks — such as pandemics, natural catastrophes or large-scale cyber attacks — from insurance coverage and on the management of non-affirmative cyber exposures.
These EIOPA supervisory statements aim to promote supervisory convergence between national competent authorities. They have been developed on the basis of the feedback that EIOPA received from stakeholders during the public consultation phase.
They recommends that the competent national authorities monitor whether insurers appropriately assess the terms and scope of coverage, where the risk arising from a systemic event becomes uninsurable or where there is a lack of clarity as to whether the risk is covered or not.
They also encourage the authorities to assess the needs, objectives and characteristics of the target market with regard to the exclusion of risks arising from systemic events, including whether or not risks arising from systemic events are covered.
The EIOPA calls for greater clarity and specific adaptation to the target market so that consumers and small businesses can better assess the risks involved - including those arising from systemic events.
The EIOPA also recommends that national competent authorities pay increased attention to the assessment by insurers of the terms and conditions of their existing insurance products covering cyber risks.
According to the EIOPA, companies should pay particular attention to traditional war and terrorism exclusions, which may not take into account the digital aspects of modern warfare and thus lead to uncertainties and ambiguities in coverage.
To consult EIOPA’s supervisory statements: https://aeur.eu/f/386; https://aeur.eu/f/387 (Original version in French by Anne Damiani)