On August 24, 2020, the IIF responded to the recent EIOPA Discussion Paper on the Insurance Value Chain and New Insurance Business Models Arising from Digitalization. The Discussion Paper reviews new insurance business models powered by digital technology; increased outsourcing of multiple functions and processes and enhanced use of third party services; insurance platforms and ecosystems. The Discussion Paper described some of the benefits and potential risks of the new insurance business models that EIOPA has identified and requested feedback on other benefits and risks. EIOPA will assess the feedback from the Discussion Paper in order to better understand these developments and related supervisory challenges and to plan useful next steps.
The IIF response encourages EIOPA and other insurance standard setters and supervisors to adopt dynamic, risk- and principles-based, technology-neutral and future-proof supervisory initiatives and guidance that reflect that insurers and their supervisors are on a learning curve with respect to the adoption of new technologies. In general, insurance supervisory initiatives and guidance should be risk- and activities-based, rather than purely entity-based, and should bring into the scope of appropriate regulation and supervisory oversight all market participants, including third-party providers. We encourage EIOPA and other insurance standard setters and supervisors to review existing regulation and guidelines, and their application and interpretation, before adopting new requirements or guidance. We also call for regulatory and supervisory coordination among jurisdictions in order to prevent regulatory fragmentation, which impedes the conduct of a global insurance business.
Our letter welcomed constructive public-private collaboration in knowledge sharing and referenced a number of IIF Staff Papers related to big data, machine learning and artificial intelligence that could be useful to EIOPA and other standard setters and supervisors.