1. VIth AIDA EUROPE CONFERENCE (Vienna, 3-4 November 2016)
Joint Working Party meeting: Consumer Protection & Dispute Resolution, Distribution of Insurance Products, Credit Insurance & Surety
“Bancassurance from the Perspective of Consumer Protection, Distribution of Insurance Products and Consumer Credit”
Bancassurance in the EU and in Greece: The impact of Solvency II on credit insurance and the IDD impact on borrower insurance
Dr. Maria Demirakou, Senior Associate - Rokas Law Firm

2. The impact of Solvency II on credit insurance: The EU perspective (1)
Risk-based capital approach
3 Pillars
No specific reference within Solvency II
Adaptations for compliance with new regime
No official quantification of implications of new regulatory regime
Critical issue: correct estimation of risk

3. The impact of Solvency II on credit insurance: The EU perspective (2)
Industry initiative to study underlying risks of credit insurance
Standards for description of exposure
Models of risks faced by credit insurers writing trade credit insurance
Methods for evaluation of Probable Maximum Loss (PML)
Assessment of capital addressing credit insurance risk portfolio
Understanding of inherent risks
Challenges

4. The impact of Solvency II on credit insurance: The Greek perspective
Recourse to bancassurance in specific cases only
Abolition of equalization reserve
Supervisory stance
Highly concentrated local credit insurance market
Influence of negative market conditions
Fluctuations in annual premium production

5. The IDD impact on borrower insurance: The EU perspective (1)
Main areas of concern
Bancassurance under IDD
General principles
Acting honestly, fairly and professionally in accordance with best interests of the customer
Fairness, clarity and no misleading nature of customer information
Disclosure of specific circumstances potentially entailing conflicts of interest
Identification of customer needs and demands
Suggestion of products addressing identified customer needs and demands

6. The IDD impact on borrower insurance: The EU perspective (2)
Granting of relevant information about the insurance product in a comprehensive form to safeguard informed purchase decision
IPID
Cross-selling practices
Where an insurance product is ancillary to a good or service that is not insurance, as part of a package or the same agreement, the insurance distributor shall offer the customer the possibility of buying the good or service separately.
Exemptions
Product oversight and governance requirements

7. The IDD impact on borrower insurance: The Greek perspective (1)
Act of Executive Committee of Bank of Greece under number 86/ on Code of Conduct of (Re)insurance Intermediaries
General principles and rules of professional conduct of (re)insurance intermediaries
Acting fairly, lawfully, and with due care and diligence
Granting of services with good faith, objectivity and impartiality
Appropriate information mechanisms safeguarding service quality
Immediate addressing of complaints or disputes

8. The IDD impact on borrower insurance: The Greek perspective (2)
Safeguarding of health competition between various insurance intermediaries
Effective management of conflicts of interests
Applicable customer information standards:
timeliness, completion, accuracy, sufficiency and appropriateness
due consideration of customer specific needs, financial state and possibility of understanding the conditions and risks of any proposed insurance product
granting thereof by appropriately qualified persons

9. The IDD impact on borrower insurance: The Greek perspective (3)
Identification of customer needs and demands and approach to risk undertaking
Proposal of insurance products meeting customer needs and demands
Prohibition of methods of unfair competition or unfair, unlawful or misleading acts or practices

10. The IDD impact on borrower insurance: The Greek perspective (4)
Circular 462/ of the Bank of Greece on distribution of insurance contracts by credit institutions
Adherence to insurance mediation laws and implementation of good faith principle in dealing with insurance program recipients, especially borrowers
Professional qualification of employees of credit institutions distributing insurance contracts
Due acceptance of insurance contracts submitted by borrower, fulfilling the covers under credit agreement

11. The IDD impact on borrower insurance: The Greek perspective (5)
Upon initiation of distribution of insurance contracts to borrowers, the competent employee shall explicitly clarify the following:
Credit institution’s simultaneous capacity as insurance intermediary
Lack of borrower’s obligation to be insured through the insurer collaborating with the credit institution
Borrower’s right to submit an insurance policy of their choice, subject to fulfillment of covers under credit agreement
Borrower’s right to cooperate with an insurance intermediary of their choice to find the appropriate insurance product

12. The IDD impact on borrower insurance: The Greek perspective (6)
Minimum mandatory content of pre-contractual information to borrower:
Clear, written and oral declaration that the credit institution offers only specific insurance products in its capacity as tied insurance intermediary
Reference (again) to borrower’s possibility to elect another insurance intermediary where they wish broader information
Prohibition of any misleading sale, by implication that only the insurance policy distributed through credit institution would fulfill credit agreement prerequisites

13. The IDD impact on borrower insurance: The Greek perspective (7)
In case of selection of credit institution for insurance mediation:
obligation for submission in writing of the pre-contractual information provided under the law; and
obligation for receipt of borrower’s signature for confirmation of relevant information
Prohibition, upon circumstances, of automatic charge of borrower’s credit cards or bank accounts for premium payment purposes
Evaluation

14. Thanks VIth AIDA EUROPE CONFERENCE (Vienna, 3-4 November 2016)
Joint Working Party meetings: Consumer Protection & Dispute Resolution, Distribution of Insurance Products, Credit Insurance & Surety
“Bancassurance from the Perspective of Consumer Protection, Distribution of Insurance Products and Consumer Credit”
Thanks
Dr. Maria Demirakou, Senior Associate - Rokas Law Firm