As recognized by EIOPA, unit-linked and hybrid products can offer important benefits for policyholders and the Capital Markets Union. The design, distribution and review of such products is already carefully regulated by the Insurance Distribution Directive (IDD), which offers all the necessary tools to ensure a high level of consumer protection.
EIOPA should therefore focus on ensuring that the current rules are properly applied by national supervisors, rather than introduce further limitations to the design and distribution of unit-linked and hybrid products, such as those proposed in its draft framework on value for money. Such an approach would limit consumers' choices, as unit-linked and hybrid products represent a vehicle for investment diversification and can provide opportunities for long-term or pension savings for consumers.
- Developing an entirely new system, with new definitions, procedures and tests, will create unnecessary additional red tape, legal uncertainty and compliance costs.
- There is no one-size-fits all definition of "value for money", as the overall adequacy of the product to the client's needs is the most important element.
- It would go beyond supervisors' role to try to limit the number of underlying investment options in unit-linked and hybrid products.
Read the full Insurance Europe response.