July 2021 Regulatory Updates

Key dates

22 October 2021

- Consultation period closes for proposals in the final report

Early 2022

- CBI intends to finalize measures post-consultation

15 March 2022

- Publication of final Insurance Requirements Regulations 2022

1 July 2022

- Regulations apply to insurance undertakings and intermediaries; ban on price walking effective

2023/2024

- CBI review confirms regulations working, no loyalty penalty observed, no further measures needed at that time

Suggested considerations

• Pricing model adjustments: Revise systems to ensure renewal premiums ≤ year-one premiums for equivalent risks; test against historical data (e.g., 11 million policy records analyzed).
• Disclosure updates: Amend new customer communications to explicitly state "new business discount" inclusion.
• Governance and reviews: Implement annual pricing policy reviews with documented evidence of customer impact assessment and fair treatment compliance; integrate into board/CPC oversight.
• Renewal processes: Obtain explicit consumer consent for auto-renewals; provide reminders and clear switching info pre-renewal.
• Monitoring and reporting: Conduct internal audits; respond to CBI engagements; retain records for supervision.

What changed

• - Ban on price walking: Insurers cannot charge second or subsequent renewal customers a higher premium than an equivalent year-one renewal customer with similar risk and service cost.
• Disclosure of new business discounts: Firms must clearly disclose to new customers that lower prices include a new business discount.
• Annual pricing policy reviews: Providers must review pricing policies yearly to ensure focus on customer impact, adherence to rules, and fair treatment.
• Automatic renewals requirements: Introduce consumer consent for automatic renewals and enhanced information/reminders to support informed decisions and switching. These were implemented via the...

Key dates

17 December 2019

- AMF Board decides authorization withdrawal

9 June 2020

& **8 December 2020** - Postponements to **30 June 2021**

1 July 2020

- Original latest effective date for withdrawal (or fund transfer/liquidation)

8 June 2021

- Postponement to **31 December 2021** for fund sales/liquidation

4 October 2021

- Conseil d'Etat rejects Nestadio's appeal

Suggested considerations

• For Nestadio Capital (historical): Cease non-essential activities under administrator control; complete fund transfers/liquidation; comply with court-appointed liquidator.
• For investors: Monitor liquidator updates at https://www.pmrpartners.com/fonds-nestadio/ and AMF communications; pursue claims via judicial process if needed.
• For industry peers: No immediate actions, but review internal compliance on authorization terms (e.g., capital adequacy); prepare contingency plans for potential AMF interventions like administrator appointments.
• AMF referrals to courts underscore need for firms to self-report issues early to avoid escalation.

What changed

• - Initial authorization withdrawal decided on 17 December 2019 due to Nestadio Capital's failure to comply with authorization terms, including capital requirements, with original effective date at...
• Multiple postponements: 9 June 2020 and 8 December 2020 extended to 30 June 2021; 8 June 2021 further extended to 31 December 2021 to facilitate fund sales and liquidation.
• 7 December 2021 postponement tied withdrawal effect to full fund liquidation or judicial liquidation closure, triggered by commercial court judgment on 17 December 2021 opening judicial liquidation...
• AMF appointed an administrator (Nathalie Baudry) initially, later a provisional administrator, and requested court appointment of PMR Partners as fund liquidator on 17 February 2022.
• Nestadio Capital's appeal to Conseil d'Etat rejected on 4 October 2021. No new broad regulatory requirements; this is a firm-specific enforcement action under Article L.