Insurance Europe has responded to a consultation conducted by the European Data Protection Board (EDPB) on its draft guidelines on the calculation of administrative fines under the General Data Protection Regulation (GDPR). The aim of these guidelines is to create a harmonised basis from which the calculation of administrative fines in individual cases can be made by national supervisory authorities. While the draft guidelines provide more detail on the factors taken into account for the calculation, they do not make the level of fines more predictable.
Pursuant to Article 83(1) of the GPDR, the turnover of the undertaking is one relevant element to take into consideration when imposing an effective, dissuasive and proportionate fine. According to the guidelines, however, for the purposes of calculating the turnover of an insurance company, the supervisory authority should also take into account insurance premiums.
This is not in line with the most recent accounting standards issued by the International Accounting Standards Board (IASB). For example, International Financial Reporting Standard (IFRS) 17 — Insurance Contracts, states that the information on insurance revenue (first line of the profit and loss statement) must not include amounts the insurer is obligated to pay the policyholder regardless of whether the insured event occurs (eg the so-called investment component). These amounts that represent the investment of the policyholder (eg the savings component of an endowment life insurance) must be excluded from the revenues in the profit and loss account.
Through this explicit requirement, the IASB, in its role as a global standard setter in the field of international accounting, has ensured the comparability of financial reporting by insurers and companies from other sectors. Insurance Europe, therefore, encourages the EDPB to update its guidelines to take into account the international standards set out by the IASB.