Insurance Europe has today published its response to a consultation by the European Insurance and Occupational Pensions Authority (EIOPA) on a framework to address value for money risk in the European unit-linked insurance market.
As recognised by EIOPA, unit-linked and hybrid products can offer important benefits for policyholders and the Capital Markets Union. The design, distribution and review of such products is already carefully regulated by the Insurance Distribution Directive (IDD), which offers all the necessary tools to ensure a high level of consumer protection.
EIOPA should therefore focus on ensuring that the current rules are properly applied by national supervisors, rather than introduce further limitations to the design and distribution of unit-linked and hybrid products, such as those proposed in its draft framework on value for money. Such an approach would limit consumers’ choices, as unit-linked and hybrid products represent a vehicle for investment diversification and can provide opportunities for long-term or pension savings for consumers.
Moreover, EIOPA should not pre-empt political discussions on the forthcoming review of the IDD ahead of the outcomes of its own report on the application of the IDD, and the European Commission’s assessment of the retail investment market.