Headquartered in Brussels Member of Founded in Sole

Headquartered in Brussels Member of Founded in Sole representative of insurance and financial intermediaries with the EU institutions 53 member associations in 30 countries, representing thousands of intermediaries

NEW DEVELOPMENTS IN INSURANCE SUPERVISION University of Antwerp 26/04/2018 Nic De Maesschalck BIPAR Director ►

“European insurance supervision has undergone significant legislative changes during the last few years. ” Source: conference brochure Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

Overview of topics under discussion, revision, implementation in Europe, with a potential impact on intermediation Mi. FID II IDD Insurance intermediaries Solvency II PRIIPs Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

Overview of topics under discussion, revision, implementation in Europe, with a potential impact on intermediation UCITs Insurance Guarantee Schemes – Mi. FID II Investor Compensation Schemes Contract law GDPR IDD Insurance intermediaries Solvency II Professional qualifications Gender equality PEPPs PRIIPs VAT, (FAT), FTT, IPT, FATCA Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018 + New regulatory instruments / procedures/ ESAs Credit agreements relating to residential property E-Commerce Directive • Anti-Money Laundering • Collective redress • Distance selling • Data protection • Public procurement IORP

Overview of topics under discussion, revision, implementation in Europe, with a potential impact on intermediation UCITs Insurance Guarantee Schemes – Investor Compensation Schemes Mi. FID II Prudential regime for investment firms Gender equality ADR / ODR IDD Fin. Tech, Insurance intermediaries Solvency II Professional qualifications Contract law GDPR Automated advice PEPPs PRIIPs VAT, (FAT), FTT, IPT, FATCA Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018 E-Commerce Directive • Anti-Money Laundering • Collective redress • Distance selling • Data protection • + New regulatory instruments / procedures/ ESAs Credit agreements relating to residential property Public procurement IORP European Services e -Card Cyber risk Brexit

“Representatives from different perspectives are invited to share their experiences. ” Source: conference brochure Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

WHO DO WE INTERACT WITH? National level International level Politicians Trade unions Consumer organisations IAIS OECD IMF/World Bank International federations FSB WTO G 20 FATF Basel Committee Academics Think tanks Press National associations Intermediaries Public opinion Insurers, financial institutions Supervisors / regulators Clients Market functioning Reputation National regulation EU level EU Parliament EU Council EU Commission Think tanks ESAs Insurers, banks, investment firms representatives Consumer representatives

“According to the European Commission’s recent proposal, the IDD should be applicable by October 2018. ” Source: conference brochure Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

IDD IMPLEMENTATION AND APPLICATION 23/02/2018 Original implementation/ application dates (Level 1 & 2) 03/04 2018 Expected publication of EU text amending original IDD implementation/ application dates Solution: retroactivity Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018 1/07/2018 1/10/2018 IDD NEW implementation application date (Level 1 & 2) 2)

“It will be elaborated whether it is desirable that insurance supervision will continue to be inspired by concepts and ideas of banking supervision. ” Source: conference brochure Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

CONSUMER RISK PROFILE INSURANCE RISK TRANSFER INVESTMENT Mi. FID II TR US HE TS DG EF UN DS IBI NS IO NS PE I OT NCO EC ME TIO N PR SU TER RA M N SE CE RIO US ILL NE SS IN ITY BIL LIA ER TY OP PR OR MO T ME HO EL INSURANCE DISTRIBUTION DIRECTIVE Ps +IBIPs Regs Chap VI €€€€€€ IT PROTECTION TR AV T SERIOUS PREMIUM €€ PE LIFE UN NEGLIGIBLE GENERAL INVESTMENT

IDD What is in it for the consumer? Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

SCOPE IDD Applies to distribution of non-life, life and IBIPs products • Insurance intermediaries (brokers, agents, comparison websites) • Direct writers Ancillary insurance intermediaries if not exempted under Article 1: • The premium does not exceed 600 euros (if duration of service is less than 3 months, the premium does not exceed 200 euros) • The risks covered are limited ( travel cancellation, loss of baggages) • But : Obligations placed on direct writers/intermediaries using exempted ancillary intermediaries Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

To act honestly, fairly and professionally in accordance with the best interest of customers Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

TRANSPARENCY PRINCIPLE Information provided to customers or potential customers must be: • Distributor’s relationship with insurers • on case by case basis about • Fair • Clear • Not misleading their status • The nature of the remuneration received in relation to the insurance contract • … Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

PRODUCT OVERSIGHT / GOVERNANCE (POG) • Insurers/manufacturers (and intermediaries manufacturing financial /insurance products) must maintain, operate and review a process for the approval of each insurance/investment product ( or significant adaptation) before it is marketed or distributed to customers. To specify an identified target market of customers for each product Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018 To ensure intended distribution strategy is consistent with market

IPID Pre-contractual information requirements • Manufacturer • Distributor Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

KEY INFORMATION DOCUMENT (KID) Identity of the PRIIP manufacturer “What is this product? ” “What are the risks and what could I get in return? ” “What happens of the PRIIP manufacturer is unable to pay out? ” “What are the costs? (+ “How long should I hold it and can I take money out early? ” “How can I complain? ” “Other relevant information”, a brief indication of any additional information documents to be provided to the retail investor at the precontractual stage, excluding any marketing material. Product Information document for Non Life products (IDD) Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

IDD What is in it for the consumer? DEMANDS AND NEEDS TEST Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

IDD What is in it for the consumer? PROFESSIONAL AND ORGANISATIONAL REQUIREMENTS Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

FOR IBIPs “Mifidization” Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

INSURANCE-BASED INVESTMENT PRODUCTS (IBIPS) • Additional/ other requirements apply in investment world versus Non life pure life. • Conflicts of interest Management • Information to customers • (Demands and needs +) Assessment of suitability and appropriateness • reporting to customers Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

Mi. FID II IDD – COI (art 27 -28) • Equivalence regime /opt out • Scope of additional requirements = addition to art 17 -20 for intermediaries and undertakings (art 26) • Firms to maintain and operate organisational + administrative arrangements to take all reasonable steps to prevent COI from adversely affecting interests of their clients (art 16. 3) • Intermediaries and undertakings to maintain and operate organisational + administrative arrangements to take all reasonable steps to • Firms to take appropriate steps to identify and to prevent or manage COI • Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018 prevent COI from adversely affecting interests of their customers. (art 27) Intermediaries and undertakings to take appropriate steps to identify COI

IBIPs Independent advice Inducements Non Detrimental impact versus quality enhancement (MIFID II) Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

IDD What is in it for the consumer? SANCTIONS Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

ADAPTATION TO AN ONGOING CHANGING SET OF RULES Delegated acts Guidance Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

ORGANIZING DIALOGUE WITH NEW SUPERVISORY SYSTEM • Develop draft technical standards, • Issue guidelines and recommendations EIOPA • Settle disagreements in cross-border situations • Monitor correct application of EU law • Intervention powers at product level EBA EIOPA papers (examples) • Guidelines on complaints handling by Insurance Intermediaries ESMA • EIOPA Report on knowledge and ability requirements for distributors of insurance products • Draft delegated Act on conflicts of interest in intermediated sales of IBIPs Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

POSSIBLE IMPLEMENTATION ISSUES Implementation issues depend upon the pre-existing situation in MS Minimum vs Maximum harmonization Mainly around the “new” aspects : • • • Terminology (e. g. consumer/customer) Ancillary intermediaries Continuous training POG - tailormade products, Bto. B… , co-manufacturer Selling outside target market For IBIPs : Mifidization 3 layer regulatory system Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

IMPLEMENTING THE NEW CULTURE • Philosophy changes • All encompassing (scope of regulations is broader) • More detail (guidance …) • Audit style supervision • Sanctions / administrative • Formalisation of relations • Documenting of policy/processes • Recording of interactions Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

“It will be elaborated whether it is desirable that insurance supervision will continue to be inspired by concepts and ideas of banking supervision. ” Source: conference brochure Nic De Maesschalck, BIPAR Director, University of Antwerp, 26/04/2018

RECENT BIPAR PUBLICATIONS ON GDPR AND LEVEL II IDD www. bipar. eu

Headquartered in Brussels Member of Founded in Sole representative of insurance and financial intermediaries with the EU institutions 53 member associations in 30 countries, representing thousands of intermediaries