1. Conduct of business: what’s new and what’s next for you at EU level?
William Vidonja
Head of Conduct of Business
Croatian Insurance Days
Opatija, 8 November 2018

2. Agenda 1 2 3 4 European regulatory landscape What’s new? What’s next?
Key take-aways 4

3. A glimpse of the EU regulatory landscape …
5 YEARS AGO
Solvency II
Environmental Liability Directive
Insurance Mediation Directive
Anti-discrimination (Gender) Directive
VAT Directive
AML Directive
Motor Insurance Directive
ADR Directive
Financial Conglomerates Directive

4. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
Solvency II
Solvency II
Environmental Liability Directive
Environmental Liability Directive
Insurance Mediation Directive
IDD
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
VAT Directive
VAT Directive
AML Directive
AML Directive
Motor Insurance Directive
IFRS
ADR Directive
ADR Directive
Financial Conglomerates Directive
Financial Conglomerates Directive
Cybersecurity (NIS Directive)
GDPR
PRIIPs
European Market Infrastructure Reg.
Anti Tax Avoidance Directive

5. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
ADOPTED LEGISLATION
Solvency II
Solvency II
AML Directive
Environmental Liability Directive
Environmental Liability Directive
IFRS 9
Insurance Mediation Directive
IDD
IORP II
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
VAT Directive
VAT Directive
AML Directive
AML Directive
Motor Insurance Directive
IFRS
ADR Directive
ADR Directive
Financial Conglomerates Directive
Financial Conglomerates Directive
Cybersecurity (NIS Directive)
GDPR
PRIIPs
European Market Infrastructure Reg.
Anti Tax Avoidance Directive

6. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
ADOPTED LEGISLATION
PRESENTED,
NOT ADOPTED
Solvency II
Solvency II
AML Directive
PEPP
Environmental Liability Directive
Environmental Liability Directive
IFRS 9
ESAs review
Insurance Mediation Directive
IDD
IORP II
Anti-discrimination (age & disability)
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
SMIT
VAT Directive
VAT Directive
E-Privacy
AML Directive
AML Directive
Country-by-country reporting
Motor Insurance Directive
IFRS
MID review
ADR Directive
ADR Directive
Free flow of non-personal data
Financial Conglomerates Directive
Financial Conglomerates Directive
Sustainable finance
Cybersecurity (NIS Directive)
Collective redress
IFRS 17
GDPR
PRIIPs
European Market Infrastructure Reg.
Anti Tax Avoidance Directive

7. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
ADOPTED LEGISLATION
PRESENTED,
NOT ADOPTED
IN THE PIPELINE
Solvency II
Solvency II
AML Directive
PEPP
SII Reviews
Environmental Liability Directive
Environmental Liability Directive
IFRS 9
ESAs review
Fintech/Insurtech
Insurance Mediation Directive
IDD
IORP II
Anti-discrimination (age & disability)
New technologies (blockchain)
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
SMIT
Big data analytics
VAT Directive
VAT Directive
E-Privacy
PRIIPs Review
AML Directive
AML Directive
Country-by-country reporting
Liability of new technologies (AI)
Motor Insurance Directive
IFRS
MID review
Costs & performance
ADR Directive
ADR Directive
Free flow of non-personal data
Climate change/EU adaptation strategy
Financial Conglomerates Directive
Financial Conglomerates Directive
Sustainable finance
C-ITS/connected & automated driving
Cybersecurity (NIS Directive)
Collective redress
Sustainable finance
IFRS 17
GDPR
Travel insurance
PRIIPs
IGS - insurance guarantee schemes
European Market Infrastructure Reg.
Anti Tax Avoidance Directive

8. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
ADOPTED LEGISLATION
PRESENTED,
NOT ADOPTED
IN THE PIPELINE
Solvency II
Solvency II
AML Directive
PEPP
SII Reviews
Environmental Liability Directive
Environmental Liability Directive
IFRS 9
ESAs review
Fintech/Insurtech
Insurance Mediation Directive
IDD
IORP II
Anti-discrimination (age & disability)
New technologies (blockchain)
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
SMIT
Big data analytics
VAT Directive
VAT Directive
E-Privacy
PRIIPs Review
AML Directive
AML Directive
Country-by-country reporting
Liability of new technologies (AI)
Motor Insurance Directive
IFRS
MID review
Costs & performance
ADR Directive
ADR Directive
Free flow of non-personal data
Climate change/EU adaptation strategy
Financial Conglomerates Directive
Financial Conglomerates Directive
Sustainable finance
C-ITS/connected & automated driving
Cybersecurity (NIS Directive)
Collective redress
Sustainable finance
IFRS 17
GDPR
Travel insurance
PRIIPs
IGS - insurance guarantee schemes
European Market Infrastructure Reg.
REVIEWS
Anti Tax Avoidance Directive

9. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
ADOPTED LEGISLATION
PRESENTED,
NOT ADOPTED
IN THE PIPELINE
Solvency II
Solvency II
AML Directive
PEPP
SII Reviews
Environmental Liability Directive
Environmental Liability Directive
IFRS 9
ESAs review
Fintech/Insurtech
Insurance Mediation Directive
IDD
IORP II
Anti-discrimination (age & disability)
New technologies (blockchain)
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
SMIT
Big data analytics
VAT Directive
VAT Directive
E-Privacy
PRIIPs Review
AML Directive
AML Directive
Country-by-country reporting
Liability of new technologies (AI)
Motor Insurance Directive
IFRS
MID review
Costs & performance
ADR Directive
ADR Directive
Free flow of non-personal data
Climate change/EU adaptation strategy
Financial Conglomerates Directive
Financial Conglomerates Directive
Sustainable finance
C-ITS/connected & automated driving
Cybersecurity (NIS Directive)
Collective redress
Sustainable finance
IFRS 17
GDPR
Travel insurance
PRIIPs
IGS - insurance guarantee schemes
European Market Infrastructure Reg.
REVIEWS
Anti Tax Avoidance Directive

10. A glimpse of the EU regulatory landscape …
5 YEARS AGO
IMPLEMENTED LEGISLATION
ADOPTED LEGISLATION
PRESENTED,
NOT ADOPTED
IN THE PIPELINE
Solvency II
Solvency II
AML Directive
PEPP
SII Reviews
Environmental Liability Directive
Environmental Liability Directive
IFRS 9
ESAs review
Fintech/Insurtech
Insurance Mediation Directive
IDD
IORP II
Anti-discrimination (age & disability)
New technologies (blockchain)
Anti-discrimination (Gender) Directive
Anti-discrimination (Gender) Directive
SMIT
Big data analytics
VAT Directive
VAT Directive
E-Privacy
PRIIPs Review
AML Directive
AML Directive
Country-by-country reporting
Liability of new technologies (AI)
Motor Insurance Directive
IFRS
MID review
Costs & performance
ADR Directive
ADR Directive
Free flow of non-personal data
Climate change/EU adaptation strategy
Financial Conglomerates Directive
Financial Conglomerates Directive
Sustainable finance
C-ITS/connected & automated driving
Cybersecurity (NIS Directive)
Collective redress
Sustainable finance
IFRS 17
GDPR
Travel insurance
PRIIPs
IGS - insurance guarantee schemes
European Market Infrastructure Reg.
REVIEWS
Anti Tax Avoidance Directive

11. Agenda 1 2 3 4 European regulatory landscape What’s new? What’s next?
Key take-aways 4

12. PRIIPs KID: a good idea
Package Retail and Insurance-based Investment Products
Key Information Document
standardised disclosure format
objectives, risks, costs, performance, etc.
Used since 1st January 2018

13. PRIIPs KID: experience
Objectives
Comparability
Understandability
Better informed decisions

14. PRIIPs KID: experience
Objectives
Financial Times
“FCA lambasted for
‘worst piece of
financial regulation
ever” (25/01/18)
“Mis-selling fears
erupt over ‘returns
of 1m% plus’”
(14/01/18)
Comparability
Understandability
Better informed decisions

15. PRIIPs KID: experience
Objectives
The Irish Times
“No KIDs, no PRIIPS:
paper jam stalling
new product sales.”
“Rules aimed at
making investment
easier are actually
making it harder”
(04/01/18)
Comparability
Understandability
Better informed decisions

16. PRIIPs KID: experience
Objectives
Het Financieele Dagblad
“Insurers: we have
to show too positive
returns to our
customers”
(28/02/18)
Comparability
Understandability
Better informed decisions

17. PRIIPs KID: experience
Objectives
International Adviser
“EU knows Priips KID
is not fit for purpose”
“The Priips Kid has been
almost universally
derided since inception.
The biggest criticism is
that it could further
complicate matters
for investors”
(24/10/18)
Comparability
Understandability
Better informed decisions

18. PRIIPs KID: experience
Objectives
Reality check
Comparability
Understandability
Better informed decisions
Confusing
Misleading
Increased
compliance risk

19. PRIIPs KID: experience
Objectives
Reality check
Comparability
Understandability
Better informed decisions
Confusing
Misleading
Increased
compliance risk
Why did it failed?
One-sized-fits-all approach
Not fit to insurance
Little consideration of impact on consumers

20. PRIIPs KID: experience
Objectives
Reality check
Comparability
Understandability
Better informed decisions
Confusing
Misleading
Increased
compliance risk
Why did it failed?
One-sized-fits-all approach
Not fit to insurance
Little consideration of impact on consumers
PRIIPs quick-fix and review?

21. GDPR: what does it provide for?
1995
2016

22. GDPR: experience Enhanced rights & obligations Legal uncertainty
High penalties for non-compliance
Increased compliance risk
Impact on innovation

23. IDD: what does it provide for?
Wider scope
Enhanced professional requirements
Increased consumer protection rules
Disclosures (including remuneration and IPID)
Advice
Cross-selling
Product oversight & governance
Enhanced rules for IBIPs

24. IDD: experience
Risk of information overload for consumers

25. IDD: experience
Unfit for digital distribution

26. Agenda 1 2 3 4 European regulatory landscape What’s new? What’s next?
Key take-aways 4

27. PEPP: what is proposed? Aim: a portable pan-European pension product
3rd pillar, personal pension, long-term saving product; provided by an EU regulated financial undertakings; and subscribed to voluntarily by an individual in view of retirement
PEPP-KID based on PRIIPs KID with additional disclosures (EC proposal)
Digital distribution by default

28. PEPP: challenges ahead?
Pre-contractual disclosures: risk of information overload
Online sale of a PEPP by an insurance intermediary (EC proposal)
Total:
PEPP KID
(51)
Originating from PRIIPs (36)
PEPP
Regulation
Proposal
(84)
PEPP-specific (15)
Product
disclosures
What about the directives on distance marketing for financial services and on e-commerce?
What about the disclosures in the Solvency II directive?
What about disclosures overlaps?
Originating from IDD (28)
Sales
disclosures
Originating from IDD DAs (5)
GDPR (13)
Distance marketing directive for financial services (27)
E-commerce directive (6/20)
??? Solvency II (14/30) ???
Product
disclosures

29. PEPP: challenges ahead?
Pre-contractual disclosures: unfit for digital distribution
Online sale of a PEPP by an insurance intermediary (EC proposal)
Disclosure overload?
PEPP KID
(51)
Originating from PRIIPs (36)
PEPP
Regulation
Proposal
(84)
PEPP-specific (15)
Product
disclosures
Originating from IDD (28)
Sales
disclosures
Paper as default option?
Originating from IDD DAs (5)
GDPR (13)
Distance marketing directive for financial services (27)
PRIIPs KID
IDD
Complaints
No layered approach?
E-commerce directive (6/20)
??? Solvency II (14/30) ???
Product
disclosures

30. Redress: what is proposed?
EC “New Deal for Consumers”, April 2018
Regulation on consumer representative actions
Permits qualified entities to launch collective actions
Covers domestic and cross-border infringements of EU law
Extends to 59 EU legislations, incl. SII, PRIIPs, IDD

31. Redress: challenges ahead?
Shortcomings
Third party litigation funding
Fails to protect traders: “loser pays” principle
No redress to consumers (small losses)
Need for safeguards to prevent blackmail settlements & malicious claims

32. Agenda 1 2 3 4 European regulatory landscape What’s new? What’s next?
Key take-aways 4

33. Take-aways for EU institutions
One-size-fits-all
Legal uncertainty
Compliance risks
Increased quantity
Paper-based
Fit-for-purpose
Consumer-tested
Quality-focused
Future-proof
Digital & innovation friendly

34. Take-aways for our industry

35. Thank you! Hvala! For more information www.insuranceeurope.eu