17 November 2011
Kay Blair, Vice Chair of the Financial Services Consumer Panel and of the EIOPA Insurance and Reinsurance Stakeholder Group, has called for the new European Supervisory Authorities (ESAs) to be judged on how well they deliver better outcomes for consumers.
Speaking at today's EIOPA annual conference in Frankfurt, Kay Blair emphasised that effective cooperation amongst the ESAs is essential, on cross sectoral issues such as financial education and literacy; complaints handling; and monitoring consumer trends so that effective and swift action can be taken to protect consumers and prevent detriment.
Kay Blair also set out her priorities for consumer protection. These include the effective use of product regulation to deal with toxic products; tackling inappropriate selling and remuneration practices; ensuring that there is meaningful disclosure of information; and that firms and authorised persons exercise a duty of care towards their clients or customers. She would also like EIOPA to focus on the effects on the general insurance market caused by profitability pressures on core General Insurance products, such as motor and household insurance, while also ensuring the consumer implications of Solvency II are well articulated. The latter is particularly relevant for those planning for retirement.
Kay Blair commented:
"Much of the work of EIOPA is very technical in nature, yet the impact on consumers could be huge. For example, profitability pressures in the insurance sector mean that insurers could face incentives to find alternative means of raising revenue or cutting costs, which could result in consumer detriment. Some insurers may reduce the coverage of policies to maintain competitive prices or look to add-on products which consumers may not require.
Although consumers' experiences across Europe are diverse, they share common needs for decent products that provide value for money; transparency of meaningful information; and simplicity and fairness in their dealings with financial services providers. The ESAs need to recognise this and supervise effectively. The industry has a huge advantage in terms of information and power. Only strong supervision allied to effective regulation can ensure that consumers are adequately protected.
Notes to editors
- The European Insurance and Occupational Pensions Authority[1] (EIOPA) is one of three European Supervisory Groups. The other two deal with banking[2] and securities and markets[3].
- Kay Blair is Vice Chair of the EIOPA Insurance and Reinsurance Stakeholder Group. This is one of two stakeholder groups that work to facilitate EIOPA's consultation with stakeholders in Europe on issues such as regulation and implementing technical standards. The stakeholder groups each include 30 members, selected from applications from high level experts after a public recruitment process. The composition of the two stakeholder groups is based on legal requirements as defined in EIOPA's regulation and members were selected for outstanding professional expertise, as well as appropriate geographical and gender balance to achieve the best available representation of stakeholders. The Insurance and Reinsurance Stakeholder Group currently consists of ten industry representatives, five consumer representatives, eight users of insurance and reinsurance services, two representatives of trade unions and five independent academics.
- The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
- The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on this website[4].