© Reuters. FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium June 17, 2022. REUTERS/Yves Herman
LONDON (Reuters) – Harmonised insurance protection schemes of last resort are needed across the European Union as consumers increasingly buy policies from outside their country, the bloc’s insurance regulator said on Tuesday.
Petra Hielkema, chair of the European Insurance and Occupational Pensions Authority (EIOPA), said cross-border premiums have been steadily increasing over the past five years compared to domestic premiums.
It also means that consumers are buying policies without knowing who is ultimately responsible if things go wrong, she said.
“Unfortunately we are seeing more cases, with policyholders in one member state receiving less protection and in case of failure less compensation than policyholders in another member state,” Hielkema told EIOPA’s annual conference.
“That, in my opinion, is unacceptable. It is therefore that EIOPA stresses that minimum harmonisation of insurance guarantee schemes is very much needed.”
Efforts by euro zone finance ministers to create a common bank deposit guarantee system failed again last week as some states fear they will end up helping weaker banks in other countries, political sensitivities which Hielkema alluded to.
“If there is no appetite for a single insurance supervisor in Europe, we still must see how we can address this shortfall. The problem will not go away,” she said.
Insurance watchdog calls for pan-EU policy protection