EIOPA consults on its proposals on Retail Investor Protection

The European Insurance and Occupational Pensions Authority (EIOPA) has launched today a public consultation on retail investor protection in relation to the sale of Insurance-Based Investment Products (IBIPs). The consultation is a response to a Call for advice, which the European Commission sent to EIOPA in July 2021. The Call for advice relates to the implementation of the European Commission’s Capital Markets Union Action Plan and, more specifically, its Retail Investment Strategy, which aims to improve consumer outcomes and increase consumer participation in capital markets.

EIOPA presents its proposals in five different areas in the consultation paper:

2) Assessing the risks and opportunities presented by new digital tools & channels

3) Tackling damaging conflicts of interest in the sales process

4) Promotion of an affordable and efficient sales process

5) Assessing the impact of complexity in the retail investment product market

The consultation paper has drawn upon the supervisory experience of national competent authorities and includes specific national examples set out in an Annexes document. EIOPA has worked closely with ESMA in developing the draft technical advice, particularly as regards identifying differences that exist between the Insurance Distribution Directive (IDD) and the Markets in Financial Instruments Directive (MiFID II). EIOPA has also given due consideration to ESMA’s ongoing work on its Call for Advice on MiFID II and the ESAs' work on the PRIIPs Review and the Digital Finance Strategy.

Stakeholders are invited to provide feedback to this consultation paper by responding to the questions via the online survey by 25 February 2022. The shortertened  consultation period of 4 weeks is warranted by the need to deliver the final advice to the European Commission by 30 April 2022. Further to this consultation, EIOPA will also hold a public hearing with stakeholders on 18 February 2022 which is open to registration until 11 February.

GO TO THE SURVEY

”Insurance-Based Investment Products” (IBIPs) are insurance products that offer a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed to market fluctuations, directly or indirectly. Typical examples of IBIPs are unit-linked life insurance, with-profits life insurance and traditional life insurance products.

“Inducements” are monetary benefits, such as commissions or fees, or non-monetary benefits such as provision of hospitality services, which are paid or received in connection with the distribution of an insurance product, to or by any party except the customer or a person acting on behalf of that customer.

“Streamlined advice” typically means advisory services that provide a personal recommendation that is limited to one or more of a customer’s specific needs. The service does not involve analysis of the customer’s circumstances that are not directly relevant to those needs.