Covid-19 Best Practices to Relief Measures Offered to Consumers and Businesses
Mon Jul 20 2020
On 14 July 2020, the European Commission published “Best practices in relation to relief measures offered to consumers and businesses in the context of COVID-19 crisis”. A copy of this document is enclosed to view here.
In the introduction of the “best practices”, the Commission specifically acknowledges the positive role of intermediaries in the services you have been providing to clients during the COVID 19 crisis, in supporting consumers and businesses to navigate through the financial aspects of this crisis”.
Following the round table meetings organised by the Commission where these best practices were presented and discussed, the roundtable participants “encourage financial institutions in the EU to follow the best practices in this document on a best-effort basis in accordance with EU legislative requirements including competition law and without prejudice to regulatory obligations and supervisory expectations”.
The best practices cover 5 areas of which four for bank and non-bank lending and one for insurers. The Commission clarifies in the introduction that the best practices “should be temporary and applied as long as they are still relevant depending on the situation in Member States”.
Two of the best practices refer directly to intermediaries: Best practice 9: “Insurers, with the support of distributors and intermediaries, are encouraged, in accordance with applicable legal requirements, to protect the interests of savers in long-term savings products by discouraging any hasty redemptions or reallocations of funds, which realise short-term losses due to falls in asset values caused by the pandemic.” and Best practice 2: “All market participants are encouraged to continue to act in the best interests of consumers, throughout the lifecycle of their relationship with the consumer”.
Both best practices applicable to intermediaries are in line with both the existing behaviour or intermediaries and the rules in the IDD and although every situation needs to be considered individually Brokers Ireland members are asked to remember these best practices at this time.