Insurance Europe: EIOPA's unit-linked proposals would needlessly limit consumer's retail investment opportunities

22 July 2021 — Daniela GHETU
Insurance Europe has published its response to a consultation by the European Insurance and Occupational Pensions Authority (EIOPA) on a framework to address value for money risk in the European unit-linked insurance market.

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.
Moreover, EIOPA should not pre-empt political discussions on the forthcoming review of the IDD ahead of the outcomes of its own report on the application of the IDD, and the European Commission's assessment of the retail investment market.

Read the full Insurance Europe response.

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