EBA欧洲银行-Final-Draft-RTS-on-PII-for-mortgage-credit-intermediaries_26页_400kb

EBA Final Draft Regulatory Technical Standards on Professional Indemnity Insurance for Mortgage Credit Intermediaries

Core Content

The European Banking Authority (EBA) has developed a final draft of Regulatory Technical Standards (RTS) under Article 29(2)(a) of Directive 2014/17/EU (Mortgage Credit Directive, MCD) to set the minimum monetary amount of professional indemnity insurance (PII) or comparable guarantee that mortgage credit intermediaries must hold. The RTS are intended to ensure legal certainty and a harmonised approach across the European Union (EU) for intermediaries in this sector.

Main Points

• Mandate: Article 29(2)(a) of the MCD mandates the EBA to develop RTS for the minimum PII or comparable guarantee, which must be submitted to the European Commission by 21 September 2014 and reviewed every two years thereafter.
• Scope: The RTS apply to mortgage credit intermediaries, defined as natural or legal persons not acting as creditors or notaries, who offer or assist in credit agreements for consumers.
• Final Amounts: The EBA has set the minimum PII requirement as:
  • EUR 460,000 per individual claim
  • EUR 750,000 per calendar year for all claims

These figures were derived from the arithmetic average of the amounts used in the six EU Member States where PII is already a mandatory requirement for mortgage credit intermediaries. Two factual errors in the original data were corrected, resulting in a reduction of the amounts by 15% and 19%, respectively.

Key Considerations in the RTS Development

The EBA considered four options for determining the minimum monetary amount:

1. Option 1: Model the impact of different minimum amounts based on consumer benefits and intermediary costs, aiming for an appropriate trade-off.
2. Option 2: Peg the minimum amount to that of insurance intermediaries under Directive 2002/92/EC, which would result in higher amounts.
3. Option 3: Set the minimum amount to the lowest level among Member States with existing PII requirements.
4. Option 4: Set the minimum amount to the average of existing national amounts, which was selected as the preferred option.

Assessment Criteria

Each option was evaluated based on the following criteria:

• Feasibility: Whether data could be collected and implemented across all 28 Member States.
• Methodological Robustness: The reliability and consistency of the method used.
• Consumer Protection: The level of protection for consumers based on the minimum amount.
• Compliance Costs: Costs for intermediaries and national competent authorities (NCAs) in implementing the requirement.
• Proportionality: Whether the approach reflects the different risks and characteristics of mortgage credit intermediation compared to other professional activities.

Feedback and Consultation

• The EBA conducted a public consultation from December 2013 to March 2014, receiving seven published responses.
• The consultation revealed that Option 4 was widely supported, and no evidence was provided to reconsider it.
• Four respondents found Option 4 to be the most reasonable, while three preferred Option 3 without a strong rationale.
• The EBA accepted feedback to correct factual errors in the data used for Option 4, leading to the final amounts.

Market Practices and National Approaches

• PII Requirements: Six Member States already require PII for mortgage credit intermediaries, while 16 do not.
• Comparable Guarantees: Only six Member States have comparable guarantees in place, with varying structures and thresholds.
• Intermediary Population: Intermediaries in the six countries with PII requirements account for approximately 73% of the total intermediary population in the EU.
• UK Approach: Uses a formula based on annual income and single claim limits, with additional capital requirements if policy excess exceeds certain thresholds.
• Spain Approach: The minimum coverage is based on the number of business premises and inflation adjustments.
• Austria and Norway: Have set minimum guarantee levels, with Norway requiring NOK 25 million.

Impact Assessment

• The impact of the RTS is expected to be relatively low for the majority of intermediaries, as many already hold PII or comparable guarantees.
• Some Member States may need to adjust their current levels upward to meet the new minimums.
• 22 Member States with low penetration of mortgage intermediation will need to introduce new requirements.
• The EBA noted that initial insurance premiums may be high due to a lack of historical data and limited competition in the insurance market.
• The EBA concluded that Option 4 provides the most balanced approach, considering feasibility, robustness, consumer protection, and proportionality.

Conclusion

The final RTS aim to harmonise the minimum monetary amount of PII or comparable guarantees across the EU, based on the average of existing national requirements. The EBA believes this approach ensures a reasonable level of consumer protection without imposing undue burdens on intermediaries or NCAs. The RTS will be binding and directly applicable in all Member States.