Can a manufacturer be held responsible for consumer detriment if the product oversight and governance (POG) arrangements were adequate?
The answer to this question is provided by the European Commission.
Article 4(3) of the Delegated Regulation (EU) 2017/2358 (DA 2017/2358) provides that “the product approval process (POG) shall: (a) ensure that the design of insurance products meets the following criteria: (i) it takes into account the objectives, interests and characteristics of customers; (ii) it does not adversely affect customers; (iii) it prevents or mitigates customer detriment;”. Following recital 1 of DA 2017/2358, the fact that a further specification of the requirements of Article 25 IDD are set out in the form of Regulation “ensures a coherent framework for all market operators and is the best possible guarantee for […] an appropriate standard of consumer protection”. The manufacturer’s compliance with Article 25(1) of the Directive 2016/97/EU (Insurance Distribution Directive - IDD) and the provisions of the DA 2017/2358, will not exclude the possibility that the manufacturer will be held responsible. In such a case, the manufacturer’s civil liability is a matter for national law and non-compliance with the product oversight and governance provisions might be a relevant factor for a court to take into account.
The disclaimer provided by the European Commission:
The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies, in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.