Insurance Europe has published its response to a call for evidence conducted by the European Commission on its new Retail Investment Strategy (RIS).
To ensure the success of the RIS, the Commission should:
- Fully account for existing legislation: The Insurance Distribution Directive (IDD) is, for example, robust and provides a very high level of consumer protection in terms of remuneration, advice and advisor competence. Furthermore, the minimum harmonisation approach makes it possible to impose additional measures where needed to reflect the needs of national markets.
- Only make changes to address a clear identified need: Any changes to the existing regulatory framework would result in costs which are ultimately born by consumers. Amendments must, therefore, be tested and proven to provide value for consumers to justify these costs.
- Focus on the needs of consumers, who require simpler and more engaging disclosures. To help consumers understand product features, disclosures must specifically highlight whether or not the product offers insurance benefits.
- Understand the differences between different markets and products: As a major provider of Packaged Retail and Insurance-Based Investment Products (PRIIPs), insurers are key to the RIS. For example, Insurance-Based Investment Products are long-term and can combine investments with insurance cover. This increases consumer protection and must, therefore, be recognised in distribution and disclosure rules.
- Test the impact of changes before implementation: Extensive consumer testing must be conducted by the Commission before implementing any changes. For example, testing would not show any benefit for consumers from the Commission’s proposals on a new suitability assessment.
Insurance Europe also highlighted the fact that the Call for Evidence does not examine the many problems identified or the concrete proposals under consideration. Stakeholders are asked to consider the impact of policy initiatives that are themselves unclear, which makes it difficult to provide meaningful feedback.