EIOPA Launch Big Data Review of the Motor and Health Insurance Markets

 

The European Insurance and Occupational Pensions Authority (“EIOPA“) has published a press release on July 6, 2018 announcing the launch of an EU wide review on the use of Big Data. The focus of the review is on the motor and health insurance markets.

The review is intended to gather empirical evidence on the use of Big Data by insurance undertakings and intermediaries along the whole insurance value chain (including pricing and underwriting, in product development, in claims management, as well as in sales and marketing).

The review will analyze the potential benefits and risks for both industry and consumers to determine what (if any) supervisory and regulatory actions are required. It will assess new business models and data quality issues arising from Big Data, including implications for consumers.

EIOPA will conduct the review in co-operation with national competent authorities (“NCAs“) with a view to covering at least 60% of the motor and health insurance markets in each member state. The data is intended to be collected during July and August 2018. The following quantitative and qualitative questionnaires have been sent to NCAs, consumer associations and representative sample of insurance undertakings:

EIOPA intends to publish the review’s key findings in the first quarter of 2019.

The review follows the cross-sectoral review of the use of Big Data by financial institutions published by the Joint Committee of the European Supervisory Authorities (“ESAs“) in March 2018.

The EDPB Replies to Queries from European Parliament on Protection of Personal Data in Context of PSD2

 

The European Data Protection Board (“EDPB“) has published a letter sent to the European Parliament in relation to the revised Payment Services Directive ((EU) 2015/2366) (“PSD2“).

The letter is in response to a request from Parliament for further clarification of a number of issues relating to the protection of personal data in the context of PSD2. The EDPB is monitoring developments owing to the complex legal framework in this area.

The EDPB comments on the following issues in the letter:

  • Whether the processing of personal data of “silent parties” is legitimate when explicit consent for the processing has (only) been given by another data subject.
  • Commission Delegated Regulation (EU) 2018/389, which contains regulatory technical standards (“RTS“) on strong customer authentication (“SCA“) and common and secure communications (“CSC“) under PSD2.
  • Whether the legal framework is sufficiently clear in relation to the processes of issuing and withdrawing consent under PSD2. The EDPB considers whether the concept of “explicit consent” included in both PSD2 and the General Data Protection Regulation ((EU) 2016/679) (“GDPR“) should be interpreted in the same way.
  • Whether banks are sufficiently cooperative in establishing secure interfaces and avoiding alternative, less secure, methods of accessing account data.

The EDPB considers that there may be grounds for “fruitful” interaction between EU data protection and financial supervision authorities. It would therefore like a dialogue between these authorities to start, with a view to then establishing a coordinated approach aimed at ensuring greater and more consistent consumer protection.

The EDPB replaced the Article 29 Working Party (“WP29“) on May 25, 2018 (the GDPR application date).

CFTC and SEC Announce Approval of New MOU

 

On June 28, 2018, the Commodity Futures Trading Commission (“CFTC“) and the Securities and Exchange Commission (“SEC“) announced that they have entered into a new memorandum of understanding – the agencies had previously entered into a memorandum of understanding in 2008 – designed to be “more relevant in the current market environment and promote efficiency in rule making, regulatory oversight, and enforcement [.]” CFTC Release. SEC Release.

European Parliament Votes to Adopt Report on Decision on Increased Regulatory Powers for ECB over Clearing Systems

 

On July 4, 2018, the European Parliament published the minutes of its plenary session, which confirms that it has voted (in plenary) to adopt a report on a draft decision amending Article 22 of the Statute of the European System of Central Banks and of the European Central Bank (“ECB“) (2017/0810(COD)).

The text of the amendments to the decision adopted by the Parliament has also been published.

The decision is in relation to the ECB’s recommendation for the decision made in June 2017, in which it asked for a greater role in regulating clearing systems for financial instruments, including central counterparties (“CCPs“), by amending Article 22 of the Statute

This amendment would enable the Eurosystem (i.e. the ECB and the national central banks of member states in the Eurozone) to monitor and assess risks posed by CCPs clearing significant amounts of euro-denominated transactions, and enable the ECB to adopt additional requirements for those CCPs.

The Parliament’s Economic and Monetary Affairs Committee (“ECON“) and Committee on Constitutional Affairs (“AFCO“) published the final version of a joint report containing proposed amendments to the decision in June 2018.

Once the Council has decided its own negotiating position, the Parliament will enter into interinstitutional negotiations with the Council of the EU on the decision.

New York Court of Appeals Requires Ambac to Follow Repurchase Protocol and Prove Elements of Fraud Claim

 

On June 27, 2018, the New York Court of Appeals ruled that Ambac Assurance Corporation (“Ambac“) could not recover the full $2.2 billion in damages it sought in the form of claim payouts on $25 billion worth of securitized mortgages from Countrywide Home Loans, Inc. (“Countrywide“). Ambac, a monoline financial guaranty insurer, had agreed to insure payments of principal and interest owed to holders of 17 RMBS securitizations that had been sponsored by Countrywide. Ambac sued Countrywide, alleging claims for fraudulent inducement and breach of contractual representations and warranties. At summary judgment, Ambac contended that it was not required to prove justifiable reliance or loss causation for the fraudulent inducement claim, and that the contract’s repurchase protocol—specified to be the sole remedy for breaches of representations and warranties—did not govern its contractual claims. READ MORE

Rating Agency Developments

 

On June 28, 2018, Fitch issued a report entitled: Fitch Updates Rating Criteria for U.S. Mortgage Insurance or Guarantee Fund Programs. Release.

On June 22, Moody’s updated its rating methodology for Insurance Brokers and Service Companies. Release.

On June 21, Fitch published rating criteria for rating asset-backed securities backed by U.S. private student loans. Release.