Abstract
AbstractThe chapter aims to analyse the recent reform of the EU regulatory framework as regards insurance-based investment products (IBIPs). The current regime provided for IBIPs offers stronger protection to all customers, regardless of the channel of distribution. In line with the EU plan to provide consistent cross-sectorial investor protection across all Member States, many IDD provisions are based on the corresponding MiFID II rules, even though some differences remain and should be further elaborated in connection with the inconsistencies, overlaps and gaps in the investor protection as far as the distribution of the IBIPs is concerned. Furthermore, several Member States have exercised the discretions recognised by the IDD as regards IBIPs mainly to gold plate investor protection measures. However, such an uncoordinated approach undermines the internal market’s objectives. Therefore, the chapter advises EIOPA to use its powers to coordinate Member States’ measures and ensure transparency about National Competent Authorities’ measures in this respect.
Highlights
Investor protection can be defined as the set of rules and principles expected to preserve the interests and the rights of a person in its role as the investor or the defensive protection of the vulnerable investor against unscrupulous market participants.1 The aim of investor protection regulation is to allow investors to make informed financial decisions which are better aligned with their interests and profile
The EU initiatives for the promotion of sustainable finance69—started in the end of 2016 with the appointment of the High-Level Expert Group (HLEG) on sustainable finance and formally launched in March 2018 with the adoption of the action plan on ‘Financing Sustainable Growth’,70 is going to reshape the regulatory framework related to the distribution of insurance-based investment products (IBIPs), with particular regard, on the one hand, to disclosure rules, and on the other, to Solvency II and Insurance Distribution Directive (IDD) framework in relation to the integration of sustainability preferences and considerations in rules concerning investment advice, prudent person principle, conflicts of interest and target market assessment
The IBIPs Guidelines we propose should include the means used to gather information about the retail investor with proper guidance depending on the way adopted to collect the information
Summary
Investor protection can be defined as the set of rules and principles expected to preserve the interests and the rights of a person in its role as the investor or the defensive protection of the vulnerable investor against unscrupulous market participants. The aim of investor protection regulation is to allow investors to make informed financial decisions which are better aligned with their interests and profile. The IDD ensures greater transparency by insurance distributors in relation to the price and costs of their products and provides higher standards as regards product information and conduct of business (COB) rules. In line with the MiFID II regime for financial instruments and structured deposits, within the IDD regime customer protection is ensured by specific provisions concerning the conduct of business rules and product governance requirements.. In line with the MiFID II regime for financial instruments and structured deposits, within the IDD regime customer protection is ensured by specific provisions concerning the conduct of business rules and product governance requirements.9 In this regard, since the IDD empowers the Commission to adopt specific Delegated Acts concerning such requirements, on February 2016, the European. Two Commission Delegated Regulations were published in autumn 2017 and targeted conduct on business rules for IBIPs and product and oversight governance applicable to all insurance contracts, including IBIPs.
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