On April 27, the IIF responded to the recently published EIOAP Open Insurance Discussion Paper. The Discussion Paper explores whether and how far insurance value chains should be "opened" by the sharing of insurance-related and specific policy-holder data amongst insurance and non-insurance firms, in order to meet the needs of policyholders and to foster innovation.
The IIF response encourages EIOPA and other insurance standard setters and supervisors to adopt dynamic, risk- and principles-based, and technology-neutral supervisory initiatives and guidance that reflect that insurers and their supervisors are on a learning curve with respect to the adoption of open insurance frameworks. We encourage EIOPA to consider allowing the open insurance market to evolve organically with supervisory oversight. This would allow open insurance to develop in response to the needs and demands of customers and enable standard setters and stakeholders to incorporate lessons learned as the open insurance market evolves. If a regulatory or supervisory approach is deemed necessary, we encourage EIOPA and other insurance standard setters and supervisors to review existing regulation and guidelines before adopting new requirements or guidance, and to coordinate regulatory and supervisory initiative across jurisdictions in order to prevent regulatory fragmentation. In general, insurance supervisory initiatives and guidance should be activities-based, rather than entity-based, and should bring into the scope of appropriate regulation and supervisory oversight all market participants, including third-party providers in order to promote a level playing field.
Our letter welcomed constructive public-private collaboration in knowledge sharing and references a number of IIF Staff Papers related to data sharing reciprocity and potential asymmetries, which could be useful to EIOPA and other standard setters and supervisors. Other key issues addressed in the IIF response include the need for a customer-centric approach to open insurance in general and safeguards around the use of customer data; the potential for open insurance to lead to financial exclusion of customers unfamiliar with digital technologies; whether data sharing should follow a mandatory or non-mandatory framework among insurers.