The European Insurance and Occupational Pensions Authority (EIOPA) warned insurers and banks on Tuesday 4 October about consumer protection issues related to the sale of credit protection insurance products. It calls on these professionals to take action or face surveillance measures.
A thematic study on the functioning of the European market for these insurance products revealed a number of practices that could be detrimental to consumers, due to poor underwriting and sales practices and insufficient safeguards to avoid conflicts of interest.
EIOPA has identified three major issues: - limited choice and barriers to shopping around; - high product diversity and price dispersion; - issues with cancellation and switching providers.
The European authority expects all insurers and banks acting as insurance distributors to comply fully with the Insurance Distribution Directive (IDD) (2016/97), including the requirements for supervision and product governance. It also asks them to take steps to address high remuneration and prevent detrimental conflicts of interest.
To consult the thematic study: https://aeur.eu/f/3ew (Original version in French by Anne Damiani)