EBA publishes Final Guidelines on Professional Indemnity Insurance under PSD2

07 July 2017

The European Banking Authority (EBA) published today its final Guidelines under the revised Payment Services Directive (PSD2), on the criteria on how to stipulate the minimum monetary amount of the professional indemnity insurance (PII) or other comparable guarantee for payment initiation services (PIS) and account information services (AIS). Undertakings intending to carry out these services will need PII cover or a comparable guarantee as a prerequisite to be granted authorisation. The Guidelines, therefore, contribute to the overall objectives of PSD2, by strengthening the liability regime governing the interactions between the different actors involved in electronic payment transactions.
 
The EBA mapped market practices in the European Union with regard to the provision of PIS and AIS and applicable insurance policies. Based on the findings of the mapping exercise, the EBA elaborated on the criteria and indicators set out in PSD2, identified additional indicators, developed a calculation method for the indicators, and established a formula for the calculation of the minimum monetary amount of the PII or comparable guarantee.
 
In the final Guidelines, the EBA considered the feedback received during the public consultation and introduced some changes and clarifications. These include additional specifications on the scope of the PII and comparable guarantee. Furthermore, the EBA deleted the indicators ‘geographical location' and ‘number of contracts' under the risk profile criterion in Guideline 5, renamed the ‘value of claims' indicator to ‘value of requests for refunds' and reduced the percentages applied to the top tiers in the calculation of some of the indicators. 
The resultant final Guidelines, therefore, require the minimum monetary amount of PII or comparable guarantee to be calculated by adding up the amounts that are reflective of the risk profile criterion, the type of activity criterion, and the size of activity criterion respectively.  
The Guidelines will apply from 13 January 2018.

Legal basis

These Guidelines have been drafted in accordance with Article 5(4) of Directive (EU) 2015/2366 on payment services in the internal market (PSD2), which mandates the EBA to issue guidelines addressed to competent authorities on the criteria on how to stipulate the minimum monetary amount of the professional indemnity insurance (PII) or other comparable guarantee for payment initiation services (PIS) and account information services (AIS). PSD2 further specifies that, when developing these Guidelines, the EBA must take into account the criteria specified in Article 5(4)(a)-(d) of PSD2. 
 

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