CMS România | EIOPA releases annual report on sanctions under IDD in 2021

According to the Report, in 2021 national competent authorities (NCAs) in 18 reporting member states imposed sanctions under the IDD framework, which resulted in a total of 1,621 sanctions.

Fines of an aggregate value of EUR 351,175 were reported (except for Germany for which the overall amount of the fines imposed in 2021 was not provided).

The top three countries by the highest number of applied sanctions includes Germany (with 1,132 sanctions); France (with 152 sanctions); and Italy (with 110 sanctions). Interestingly, the overall number of sanctions decreased in 2021 compared to 2020 and 2018-2019. 

1. Breach of the IDD provisions

Concerning breaches resulting in sanctions, the Report reveals that most of the sanctions referred to breaches related to Article 10 (Professional and organisational requirements) of the IDD, as follows:

The above shows that the most sensitive area from a compliance perspective is related to professional training and development requirements, and the conclusion of professional indemnity insurance.

In addition to breaches related to Article 10 of the IDD, it is worth mentioning the additional IDD provisions whose non-observance resulted in sanctions, especially in relation to compliance formalities for accessing the profession, complaints, requirements related to conduct of business and customer information, or suitability assessments:

2.Types of sanctions

While most of the applied sanctions were of an administrative pecuniary nature (735), in 2021 NCAs also applied other sanctions, such as: withdrawal of registration (533); and other administrative sanctions and measures (164), orders to cease and desist (92), and public statements (23).

 

3. Conclusions

The Report offers certain insights to the market in relation to the approach of NCAs when they assess compliance with the requirements of the national framework transposing the IDD. It is notable that NCAs do not avoid the application of radical measures such as withdrawal of registration or orders to cease and desist. Also, the lack of compliance, which triggered the application of sanctions, relate mainly to non-compliance with the provisions of Article 10 of the IDD (Professional and organisational requirements).

For information on the EIOPA's Report and how it could affect your business, contact your usual CMS contact or local experts: Cristina Popescu and Florentin Giurgea.