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29 January 2021

Insurance Europe: Why ESA’s proposed changes to PRIIPs RTS won’t work


Insurance Europe has today issued a paper outlining the reasons why changes proposed by the European Supervisory Authorities (ESAs) to the regulatory technical standards (RTS) of the Packaged Retail and Insurance based Investment Products (PRIIPs) Regulation will not work or deliver benefits for consumers.

The ESAs and the European Commission are currently considering whether to reintroduce proposed changes to the PRIIPs RTS that were rejected by the European Insurance and Occupational Pensions Authority's board of supervisors in July.

Rejecting the proposed changes was the right decision, and these flawed proposals should not be resurrected because:

  • The rejected proposals included a confusing presentation of performance that mixes past and future performance and that is not comparable between different product types, particularly insurance-based products.
  • The rejected proposals also changed aspects of the presentation of costs that were working well and replaced them with inconsistent cost indicators which would make comparison between products impossible.
  • The proposed changes to the presentation of multi option products are over complicated and would not make it easier for consumers to understand.

Furthermore, implementing these changes would result in a significant administrative burden for insurance companies while providing no benefits to their customers.

Instead of pursuing these proposals any further, legislators must commit to a full level 1 review of the PRIIPs Regulation that addresses the underlying problems with the PRIIPs key information document rather than looking for quick fixes that would only undermine consumer understanding.

Full paper



© InsuranceEurope


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