It is frustrating that PRIIPs are treated as if they are only applicable to asset managers, when 75% of PRIIPs are in fact insurance-based investment products.
Following press reports that the European Commission has put pressure
on the European Supervisory Authorities (ESAs) to propose, by the end
of January, technical solutions to make the key information document
(KID) for packaged retail and insurance-based investment products
(PRIIPs) suitable for undertakings for collective investment in
transferable securities (UCITS), in view of the end of the exemption for
these funds from PRIIPs rules in December 2021, William Vidonja, head
of conduct and business at Insurance Europe, said:
“It is frustrating that PRIIPs are treated as if they are only
applicable to asset managers, when 75% of PRIIPs are in fact
insurance-based investment products. For example, all the technical
proposals that have been put forward so far to amend the PRIIPs KID have
been designed with customers buying investment funds in mind, instead
of insurance consumers. This approach is wrong. Consumers buying
insurance-based investment products should not be treated as second
class.
“The European Insurance and Occupational Pensions Authority’s board
of supervisors was therefore right to reject the previous proposals. The
proposed changes to the PRIIPs KID were not sufficiently tested and
would have made the KID worse than it is now. This would have meant even
more confusion for insurance consumers and further undermined their
understanding of the insurance-based investment products they were
purchasing.
“Since its application in 2018, the PRIIPs regulatory framework has
already gone through a series of eight adjustments, including
guidelines, Q&As and supervisory statements. These changes have not
fixed the problems.
“We therefore do not need another ‘quick fix solution’ that doesn’t
work and that would only result in insurance consumers becoming even
more confused. Furthermore, we do not see how, in such a short
timeframe, the ESAs and the European Commission can develop meaningful
and thoroughly tested technical solutions that would be workable for our
products and that would benefit insurance consumers. Instead, the
recently launched Commission study on distribution and disclosures would
provide a solid basis on which to rethink the approach on PRIIPs.
“We look forward to the Commission and the ESAs working on solutions
that actually benefit insurance consumers and prioritise them, rather
than self-imposed deadlines related to other products.”
Insurance Europe
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