03 October 2014

EIOPA: Consultation paper on conflicts of interest in direct and intermediated sales of insurance-based investment products

The European Insurance and Occupational Pensions Authority welcomes comments on the Consultation Paper on Conflicts of Interest in direct and intermediated sales of insurance-based products (PRIIPs).

For the purposes of consistency, the Commission has invited EIOPA to consider the existing conflicts of interest framework under the current MiFID Implementing Directive (Directive 2006/73/EC) (hereafter “MiFID Implementing Directive”) and to develop a similar framework for insurance intermediaries and insurance undertakings distributing insurance-based investment products.

In order to provide stakeholders with an early orientation on issues that will need to be addressed in the technical advice to the Commission and to gather feedback from the market, EIOPA published a Discussion Paper on 21 May 2014.

Many respondents to the Discussion Paper emphasized that the rules on conflict of interest which can be found in the MiFID Implementing Directive should carefully be adapted to the specificities of the insurance sector. Furthermore, many argued in favour of clarification that the principles of proportionality should be applicable to avoid excessive administrative burden and costs, especially with regard to small undertakings and sole traders. Many respondents also expressed concerns that too far-reaching implementing measures on inducements could lead to a de facto ban on commission-based business models. A number mentioned, however, the crucial importance of such measures in their view from the perspective of the customer.

Having taken account of the feedback received from stakeholders, EIOPA has prepared this Consultation Paper which presents, in more detail, the recommendations that EIOPA considers including in its Technical Advice to the Commission. Interested parties are invited to comment on these proposals.

EIOPA has been requested by the Commission to support its Technical Advice to the Commission with data and evidence on the potential impacts of proposals identified, including an assessment of the relative impacts of different options where this is appropriate. Where impacts might be substantial, the Commission has requested, where feasible, that EIOPA provide quantitative data. The provision of such data and evidence will aid the Commission in preparing an impact assessment on the measures it shall adopt.

In order to gather feedback from market participants and interested parties, EIOPA has already included a high-level assessment of possible impacts within its Discussion Paper, accompanied by specific questions. EIOPA is now considering the feedback received on the Discussion Paper, in order to prepare a submission on possible impacts alongside its Technical Advice. In developing this submission, EIOPA will also build upon the impact assessment work undertaken by the Commission for the revisions of the IMD and MiFID.

To further gather input from market participants and interested parties, EIOPA has also included specific questions in this Consultation Paper related to the assessment of impacts. EIOPA acknowledges that the impact of the proposals may differ significantly because of different market structures and already existing regulatory regimes in the different Member States of the European Union. In order to enable a thorough assessment, respondents are therefore invited to provide EIOPA with any data that they have related to the possible impacts of the proposals outlined.

Comments should be sent to EIOPA, in the provided Template for Comments, by 18:00 CET on 1st December 2014.

Full consultation paper

Template for comments

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