21 January 2014

Insurance Europe: MiFID - IMD 2 best place to regulate insurance investment products

“Insurance Europe believes that the appropriate place to regulate conduct of business and sales rules for insurance investment products is the revised IMD (IMD 2), as originally proposed by the Commission", said Michaela Koller, Insurance Europe’s director general. In-depth discussions in the European Parliament on IMD 2 have sought to improve regulation in the retail insurance market for the benefit of consumers by regulating selling practices for all insurance products, including insurance investment products.

“Amending IMD 1 is an interim solution, as it will be replaced by IMD 2, which is currently being discussed by the EU institutions. This may make the implementation of the rules unnecessarily burdensome and expensive for companies and intermediaries", said Koller.

Insurance Europe acknowledges that the text agreed in the MiFID 2 trialogue seeks to achieve an appropriate compromise and strongly supports the approach that allows each member state to decide whether to prohibit or further restrict the offer or acceptance of fees, commissions or non-monetary benefits from third parties. It does not believe that any one system of remuneration should be preferred over another. This approach takes into account the diversity of insurance distribution channels across Europe and is in line with the subsidiarity principle.

The definition of insurance investment products should, however, be consistent across financial services legislation and should be established under the Packaged Retail Investment Products (PRIPs) Regulation itself. Insurance Europe therefore has strong concerns about the inclusion of a definition in the text.

Insurance Europe supports the exemption for pension products, which are not comparable with other investment products because they are a type of savings product that provides a secure income for retirement and offers limited or no access to these savings during the accumulation phase. It is, however, disappointed that there was no equivalent exemption for life insurance products where no investment risk is borne by the policyholder. Such an exemption would be consistent with existing EU legislation, in particular the Solvency II Directive.

Press release

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