EIOPA has issued a warning to insurers and banks (acting as insurance intermediaries) following the conclusion of its thematic review into credit protection insurance (CPI) products, which are also known as payment protection insurance (PPI) products.
The main consumer issues identified in the review were:
- Limited product choices and barriers to shopping around
- Difficulties in comparing products
- Difficulties with cancellation or switching
- Consumer preferences not considered in product design
- Issues with sales practices
- High profitability and conflicts of interest
As well as publishing its full review, EIOPA has issued a helpful factsheet setting out its key findings and next steps (link to the full review and factsheet below).
EIOPA has indicated that insurers and banks distributing CPI products can expect EIOPA and national competent authorities to prioritise monitoring of the CPI market.
The Central Bank of Ireland previously conducted a review of the sales practices of certain banks operating in Ireland in relation to PPI products, so Irish insurers and banks still operating in this market can expect further regulatory scrutiny.
Warning to insurers and banks on Credit Protection Insurance (CPI) products (EIOPA)
Thematic Review on Credit Protection Insurance (CPI) sold via banks (EIOPA)
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.