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EU watchdog tackles insurance policy price differences
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LONDON (Reuters) -The European Union’s insurance watchdog launched a public consultation on Monday to crack down on how insurers unfairly charge customers different prices for the same type of cover.
LONDON (Reuters) -The European Union’s insurance watchdog launched a public consultation on Monday to crack down on how insurers unfairly charge customers different prices for the same type of cover.
The European Insurance and Occupational Pensions Authority (EIOPA) said it was looking in particular at so-called price walking.
This practice refers to raising premiums when a policy is being renewed based on an assessment of how much of a hike a consumer would tolerate before shopping around, rather than based on risk or cost of service.
“Price walking practices in particular can have a detrimental effect on policyholders who are unlikely to switch providers,” EIOPA said in a statement.
“The practice unfairly penalises loyal customers and can disproportionately affect vulnerable groups such as the elderly.”
EIOPA, which coordinates supervision of insurers across the 27-country EU but issuing guidance to national regulators, launched a three-month public consultation on draft guidance on differential pricing practices.
(Reporting by Huw Jones, Editing by Louise Heavens)
Price walking is a practice where insurance companies increase premiums upon policy renewal based on customer tolerance for price hikes, rather than on the actual risk or cost of service.
The European Insurance and Occupational Pensions Authority (EIOPA) is an independent EU authority that oversees the insurance and pension sectors, ensuring consumer protection and financial stability.
Differential pricing practices refer to the strategy of charging different prices for the same insurance coverage based on factors like customer loyalty or willingness to switch providers.
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