European Insurance Industry Voices Concerns over FIDA Proposals
Insurance Europe, the European insurance and reinsurance federation, has expressed concerns about the EU's Financial Data Access (FIDA) proposal, warning that it could become overly costly, complex, and counterproductive for the financial sector. In response, Insurance Europe has put forward four key recommendations to simplify the proposal and ensure it benefits both customers and the industry.
The federation's concerns revolve around the current complexity of FIDA, its potential costs, and the potential negative effects it could have on the financial sector. To address these issues, Insurance Europe has proposed simplifying the scope and timeline of the proposal, clarifying legal definitions and exclusions, ensuring a level playing field, and restricting mandatory data-sharing to approved schemes.
To simplify the proposal, Insurance Europe suggests limiting the products covered by FIDA based on actual market demand, excluding reinsurance undertakings and large corporates, and extending implementation timelines across all phases. This approach would reduce pressure on companies and make the proposal more manageable.
In terms of legal clarity, Insurance Europe recommends precisely defining the "customer" as the policyholder in insurance contexts, excluding sensitive personal data, commercially sensitive data, insurance products involving health data, results of suitability and appropriateness assessments, and avoiding blanket real-time data sharing requirements. This would help reduce legal uncertainty and compliance burdens.
To ensure a level playing field, Insurance Europe proposes excluding gatekeepers and third-country Financial Information Service Providers (FISPs) from accessing customer data, and requiring regular review of FISP authorization rather than one-time approvals. This would maintain robust oversight and prevent unfair advantages.
Finally, Insurance Europe suggests confining mandatory data sharing to approved, regulated financial data-sharing schemes to ensure compliance, fair compensation, and secure data handling. Voluntary sharing outside these schemes should remain possible to maintain flexibility.
The EU's Financial Data Access proposal aims to create a framework for the mandatory sharing of financial data between companies with customer consent. It introduces an industry-led scheme development system, allowing sectors to design access, use, and governance rules for data sharing, promoting standardization, cross-sector interoperability, and long-term value creation. However, risks remain around governance uncertainty, negotiating compensation, and fragmentation, which Insurance Europe’s recommendations seek to mitigate.
Meanwhile, the European Parliament's Committee of Economic Affairs has rejected the UK model of reducing Solvency II cash reserves and spending it on green projects instead. It remains to be seen how this decision will impact the UK's insurance industry and its efforts to promote sustainability.
- The complications and costs associated with the EU's Financial Data Access (FIDA) proposal have been highlighted by Insurance Europe, who warn that it could negatively affect the financial sector.
- To ease these concerns, Insurance Europe has suggested simplifying the proposal's scope and timeline, defining legal terms clearly, ensuring a level playing field, and limiting mandatory data-sharing to approved schemes.
- The federation also recommends excluding sensitive data, reinsurance undertakings, and large corporates from the proposal, extending implementation timelines, and maintaining robust oversight to prevent unfair advantages.
- Meanwhile, the European Parliament's Committee of Economic Affairs has declined the proposal to reduce Solvency II cash reserves for green projects in the UK, potentially impacting the UK's insurance industry and its sustainability efforts.
