Abstract
The use of the term ‘transparency’ in the context of insurance regulatory law only truly made its way into Portuguese legislation in 2016. In this chapter, we set ourselves the tasks of finding out whether, when employed in this context, the term has taken on a different meaning or different implications than it assumes when used in the context of insurance contract law, and of pinpointing such differences. We have found that the notion of information appears to be at the centre of all such uses of the term. All references thereto are related to the creation of general or more specific information or disclosure duties. However, in insurance contract law, a common usage of the term is focused on the nurturing of data-sharing communication between the insurer on one side and the policyholders, the insured, the beneficiaries and injured third parties on the other side, thus demanding the creation of information duties in the Hohfeldian sense where they represent the jural correlatives of individual rights. There is also a relevant performative component to most such exchanges, given that contracting parties are doing more than provide information; they are giving rise to their contracts as they communicate with one another. In insurance regulatory law, the term appears to have taken on, if not a different meaning, at least some different implications. We have found no performative element in the prescribed conducts, and the creation of disclosure duties has not entailed the creation of correlating individual rights. And the addressees of transparency demands appear to be much more diverse than they are in the context of insurance contract law: the legal system, the market, the regulators and all those regulated must all be ‘transparent’. Despite its relative novelty, transparency appears to have become an EU catchword, transparency requirements being seemingly here to stay and on the rise, if we put together all the transparency references and requirements stemming from the European Insurance and Occupational Pensions Authority (EIOPA) Regulation, the Solvency II Directive and the Insurance Distribution Directive.
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Notes
- 1.
Rego (2019b).
- 2.
For a more detailed account of insurance law and regulation in Portugal, see Rego (2019a).
- 3.
As amended by Directive 2011/89/EU of the European Parliament and of the Council of 16 November 2011, Directive 2012/23/EU of the European Parliament and of the Council of 12 September 2012, Directive 2013/23/EU of the Council of 13 May 2013, Directive 2013/58/EU of the European Parliament and of the Council of 11 December 2013, Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014, Directive 2016/2341 of the European Parliament and of the Council of 14 December 2016, Regulation 2017/2402 of the European Parliament and of the Council of 12 December 2017 and Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018.
- 4.
As amended by Decree-Law 359/2007 of 2 November 2007, Law 46/2011 of 24 June 2011, Decree-Law 1/2015 of 6 January 2015, Law 147/2015 of 9 September 2015, Law 35/2018, of 20 July 2018.
- 5.
For an overview of the relevant legislation on the protection of consumers in Portugal, with a special focus on insurance, see Alves (2009), pp. 16–43.
- 6.
As amended by Decree-Law 220/95 of 31 January 1995, Decree-Law 249/99 of 7 July 1999, and Decree-Law 323/2001 of 17 December 2001.
- 7.
As amended from time to time, the last of which by Law 63/2019 of 16 August 2019.
- 8.
All of which are applicable to insurance and reinsurance undertakings and intermediaries, as determined by Articles 3, 19 and 21(3) of PICA. See Barroso (2016), pp. 201–204 and 208–209.
- 9.
See Article 34 of Regulation (EU) No. 1286/2014 as amended by Regulation (EU) 2016/2340 of the European Parliament and of the Council of 14 December 2016.
- 10.
See EBA’s EIOPA’s and ESMA’s Final Draft Regulatory Technical Standards with regard to Presentation, Content, Review and Provision of the Key Information Document, including the Methodologies Underpinning the Risk, Reward and Costs Information in accordance with Regulation (EU) No 1286/2014 of the European Parliament and of the Council, of 31 March 2016. A similar approach has been adopted and will involve both the life and non-life insurance sectors upon the implementation of the Insurance Distribution Directive. The IDD places additional requirements on the sale of complex insurance-based investment products (IBIPs), requiring insurers to provide information on the costs of the distribution service in addition to the information which they are already bound to provide on the product itself under the PRIIPs Regulation. See EIOPA’s Final Report on Public Consultation on Preparatory Guidelines on product oversight and governance arrangements by insurance undertakings and insurance distributors, of 6 April 2016, and its Final Report on Consultation Paper no. 16/006 on Technical Advice on possible delegated acts concerning the Insurance Distribution Directive, of 1 February 2017, pp. 29–60. See Article 30 of the IDD and articles 40 to 43 of PIDA.
- 11.
See www.asf.com.pt/EN.
- 12.
See article 7(1)(a) of Decree-Law 1/2015.
- 13.
See Article 2 of the packaged retail and insurance-based investment products legal regime, approved by Law no. 35/2018, 20 July 2018.
- 14.
Decree-Law 228/2000 of 23 September 2000, amended by Decree-Law 211-A/2008 of 3 November 2008, Decree-Law 143/2013, of 18 October 2013, and Law 118/2015 of 31 August 2015.
- 15.
Subsequently modified by ASF Regulation 8/2007-R of 31 May 2007, ASF Regulation 13/2007-R of 26 July 2007, ASF Regulation 19/2007-R, of 31 December 2007, ASF Regulation 17/2008-R of 23 December 2008, ASF Regulation 15/2009-R of 30 December 2009, ASF Regulation 23/2010-R of 16 December 2010, ASF Regulation 7/2011-R of 8 September 2011, ASF Regulation 4/2016-R of 12 May 2016, and ASF Regulation 6/2019-R of 3 September 2019. According to Article 35 of PISA, all regulations previously issued by ASF under the umbrella of the prior legal framework remain in force until expressly replaced by new ones, insofar as they do not contradict the new framework.
- 16.
See Rego (2019b), pp. 213–215.
- 17.
See Rego (2019b), pp. 213–215.
- 18.
See Hohfeld (1913).
- 19.
Available online at www.iaisweb.org. The term ‘transparency’ is used multiple times throughout these Insurance Core Principles.
- 20.
Recital 10 of the EIOPA Regulation.
- 21.
See also Recital 26 and Articles 1(6)(b) and 9(1) of the EIOPA Regulation.
- 22.
Recital 51 of the EIOPA Regulation. See also Recital 64.
- 23.
From an international economic law perspective, see Zoellner (2006), pp. 582–586.
- 24.
See Article 35(2) of Solvency II Directive.
- 25.
See Article 34(3) of Solvency II Directive.
- 26.
See Article 29(1) of Solvency II Directive.
- 27.
See Article 36(2) of Solvency II Directive.
- 28.
See Wandt (2012), pp. 9 and 18.
- 29.
V.g., see Recital 1 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments.
- 30.
See also Recital 104 of the Solvency II Directive.
- 31.
Article 26(1) of PISA.
- 32.
Article 26(2) of PISA.
- 33.
According to Article 46 of Decree Law 1/2015, ASF must also publish the following information on its website: (i) all statutes and regulations applicable to ASF; (ii) the objectives of its supervision and its main attributions and activities; (iii) the composition of its bodies, including biographical data and their remuneration; (iv) the plans and reports of its activities and its budget and accounts; (v) its plan on the prevention of corruption risks and related infringements; (vi) all sector legislation, regulations and recommendations; (vii) statistical data and reports, as well as any other documents considered relevant for supervisees, policyholders, the insured, beneficiaries, injured parties, pension fund associates, participants and beneficiaries and the general public; (viii) relevant information on its sanctioning and regulatory activities.
- 34.
- 35.
See Câmara (2016), pp. 283–288; Wandt (2012), p. 18. Of course, the relationship between public authorities and the legal and physical persons affected by their decisions already had to follow a measure of transparency requirements, even if no such terminology was used, in the sense that pursuant to general administrative law someone affected by any decision issued by a public authority had the right to be properly informed, namely, as to the procedures and grounds underlying such decision. On the general right of information towards public entities, see Articles 82 to 85 of Decree-Law 4/2015 of 7 January 2015, approving the Administrative Procedure Act, and Law 26/2016 of 22 August 2016, which implemented Directive 2003/4/EC of the European Parliament and of the Council of 28 January 2003 on public access to environmental information and Directive 2003/98/EC of the European Parliament and of the Council of 17 November 2003 on the re-use of public sector information. See, v.g., articles 11(2) and 11(3) of the Treaty on European Union and article 15(3) of the Treaty on the Functioning of the European Union. See Fernandes (2015), pp. 430–434, 437–439, 450–456; Antunes (1993), pp. 2–3, 14–24 and 51–55.
- 36.
Article 317(2) of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014.
- 37.
- 38.
See Zoellner (2006), pp. 585–586.
- 39.
See Zoellner (2006), p. 588.
- 40.
See Article 27 of the Solvency II Directive.
- 41.
See Articles 51 to 56 of the Solvency II Directive.
- 42.
See Article 64(2)(a) of PISA, and the corresponding Article 41(1) of the Solvency II Directive.
- 43.
See Article 153(1) of PISA.
- 44.
See Article 68(3)(a) of PISA.
- 45.
Article 35(1) of the Solvency II Directive.
- 46.
Article 81(2) of PISA.
- 47.
See Article 81(3) of PISA and Article 35(1) of the Solvency II Directive. In particular, regarding capital requirements, business organization and other reporting duties, see Wandt (2012), pp. 19–20.
- 48.
See Article 81(7)(b) of PISA.
- 49.
See Articles 25(2), 27(1)(b) and 27(4) of PISA and Article 34(3) and (5) of the Solvency II Directive.
- 50.
See Article 27(1) of PISA.
- 51.
See Articles 300 and 302 of Commission Delegated Regulation 2015/35.
- 52.
Comprising the information referred to in Articles 307 to 311 and articles 293 to 297 of Commission Delegated Regulation 2015/35.
- 53.
Comprising the results of each regular own risk and solvency assessment in accordance with Article 45(6) of the Solvency II Directive, whenever an own-risk and solvency assessment is performed in accordance with Article 45(5) of the Solvency II Directive.
- 54.
See Article 304 of Commission Delegated Regulation 2015/35. The reporting framework regarding the provision of information by insurance and reinsurance undertakings to ASF under Article 81 of PISA has been elaborated upon in ASF’s Regulation 8/2016-R of 16 August 2016. This regulation comprises notably the following information and reports: (i) regular information under Articles 304 e 372 of Commission Delegated Regulation 2015/35 and Commission Implementing Regulation (EU) 2015/2450 of 2 December 2015 laying down implementing technical standards with regard to the templates for the submission of information to the supervisory authorities according to Directive 2009/138/EC of the European Parliament and of the Council; (ii) regular information for the purposes of Regulation (EU) 1374/2014 of the European Central Bank of 28 November 2014 on statistical reporting requirements for insurance corporations; (iii) regular information for the purposes of financial stability to be provided to ASF under Article 35 of the EIOPA Regulation; (iv) report of the certified public accountant and report of the responsible actuary; (v) accounting, statistical and conduct information; (vi) report related with the mechanisms and procedures adopted for the purposes of the report, tracking and prevention policy on insurance fraud (Article 3 of Regulation 8/2016-R).
- 55.
Additionally, insurance and reinsurance undertakings must annually submit their annual accounts to ASF (consolidated, if applicable) (Article 85(1) of PISA).
- 56.
See Article 83(1) of PISA and Article 51(1) of the Solvency II Directive.
- 57.
See Article 83(2) of PISA and Article 51(2) of the Solvency II Directive. See also Article 83(12) of PISA and Article 55(2) of the Solvency II Directive.
- 58.
There is one slight exception, since pursuant to article 14(2)(a) of PIDA, when assessing the fit and proper requirements, it should be considered namely evidence that the person did not act transparently and cooperatively in their dealings with any national or foreign supervising or regulating authorities.
- 59.
See article 4(b) of PIDA and article 2(1)(8) of IDD. Contrasting with the previous regime which pursuant to article 3(1)(a) of Decree-Law 144/2006 expressly excluded from its application the mediation activities related with insurance mediation pursued by insurance undertakings.
- 60.
Most of them set forth in Articles 23 to 46 of PIDA. Under the previous regime, it should be noted that Decree-Law 144/2006 also envisaged duties applicable to insurance and reinsurance undertakings, mainly regarding their conduct towards insurance and reinsurance intermediaries (v.g., the duty not to resort to insurance mediation services provided by non-registered persons). See Articles 37 and 38 of Decree-Law 144/2006. See Vasques (2006), pp. 128–138.
- 61.
See also Recitals 3 and 52 of the IDD.
- 62.
See Martinez et al. (2019), pp. 284–391
- 63.
See Article 24 of PIDA.
- 64.
See Article 29 of PIDA.
- 65.
See Article 30 of PIDA.
- 66.
See Article 31, 32 and 33 of PIDA. On intermediaries’ pre-contractual liability, see Poças (2013), pp. 570–576.
- 67.
See Article 34 of PIDA.
- 68.
See Article 35 of PIDA.
- 69.
See Article 36 of PIDA.
- 70.
See Article 37 of PIDA.
- 71.
See Article 38 of PIDA.
- 72.
See Article 39 of PIDA.
- 73.
See Articles 40 to 46 of PIDA.
- 74.
See Article 19 of the IDD.
- 75.
- 76.
See Article 32(1)(h) of Decree-Law 144/2006.
- 77.
See article 31(1)(g) and article 37(2)(c) of PIDA, applicable to insurance intermediaries and insurance undertakings respectively. See also Article 19(1)(e) of the IDD.
- 78.
See above n. 18.
- 79.
According to Article 34 of PIDA.
- 80.
See also Article 60 of PIDA.
- 81.
See article 24(1)(j) of PIDA.
- 82.
See also Articles 60(2) and 65 to 68 of PIDA.
- 83.
Article 69 of PIDA.
- 84.
Recital 24 of the IDD. Other references to transparency may be found in Recitals 36 and 69 and in Article 22(4) of the IDD. For a more developed analysis of the IDD, see Rego (2019b), pp. 231–236.
- 85.
See Zoellner (2006), pp. 580–581.
- 86.
See above n. 18.
- 87.
See Rego (2019b), p. 216.
- 88.
This is not to say that only private law caters for the protection of policyholders, the insured, beneficiaries and injured third parties. The main end of supervision is also the protection of the exact same classes of individuals. See Article 27 of the Solvency II Directive. However, in insurance regulatory law this end is typically pursued through different legal mechanisms.
- 89.
Commenting on ‘transparency’ as a buzzword in contemporary public discourse, see Han (2015), p. 1. The author criticizes ‘[t]he omnipresent demand for transparency, which has reached the point of fetishism and totalization’.
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The analyses, opinions and findings of this article represent the views of the author, they are not necessarily those of the Portuguese Insurance and Pension Funds Supervision Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões).
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Rego, M.L., Seixas, D.C. (2021). Transparency in Insurance Regulation and Supervisory Law of Portugal. In: Marano, P., Noussia, K. (eds) Transparency in Insurance Regulation and Supervisory Law. AIDA Europe Research Series on Insurance Law and Regulation, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-030-63621-0_10
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