A New Model of Investment Life Insurance Distribution in the Context of Consumer Protection EU Policy

Abstract

Offering investment-linked life insurance products and their actual sale is inseparably associated with particular trust in institutions in charge of the offer. Recently, there has been a significant decrease in the consumer confidence in the European insurance industry which contributed to a growing trend in consumer protection with respect to investment life insurance products.The chapter presents issues related to the latest phenomena occurring in the European life insurance market that reinforced some corrective and preventive measures aimed at the clients of investment insurance products, such as unlawful business practices held by insurance companies, performing insufficient information policies and offering products with unclear structure.The work elaborates on strategies performed in the course of preventive measure development along with the most significant legislation, including the aspects of product transparency, as well as the new sales policy model for life insurance products. The author also addresses the guidelines of the so-called IDD (Insurance Distribution Directive), whose aim is to further strengthen a customer’s advantage as the addressee of insurance services as resulting from intensive pro-consumer initiatives in Europe.Moreover, there are opportunities for insurance distribution implementation presented in the chapter as based on the most recent legislation, recommendations, and consumer demand. These, in turn, are believed to increase the consumer protection and in the future hopefully to contribute to the development of the life insurance product market.The purpose of the paper is to discuss the most important changes currently taking place in the European insurance market and to indicate the possibilities of improving the situation of consumers related to the quality of distribution of insurance-based investment products offered in it.