The methodology outlines a common European approach on how to identify unit-linked products which may offer poor or no value for money and require a close monitoring by national competent authorities (NCAs) to ensure risks are sufficiently identified, monitored and mitigated.
The European Insurance and Occupational Pensions Authority (EIOPA)
published today its methodology for assesing value for money in the
unit-linked market.
The methodology
outlines a common European approach on how to identify unit-linked
products which may offer poor or no value for money and require a close
monitoring by national competent authorities (NCAs) to ensure risks are
sufficiently identified, monitored and mitigated. It follows a top down
process based on three layers of analysis: a market wide assessment, an
enhanced product analysis and an assessment of the product oversight and
governance (POG) process and documentation. For each layer, the
methodology indicates different tools and provides information on how to
perform the analysis.
While the objective of the methodology is to ensure a minimum common
approach towards addressing value for money by NCAs, EIOPA welcomes and
encourages additional steps taken by NCAs.
The methodology also offers more clarity to insurance manufacturers
and distributors regarding the supervisory expectatons when addressing
value for money.
To achieve consistent consumer outcomes in all European markets, the
methodology provides flexibility to take into account market
specificities and to address emerging risks, such as rising inflation.
EIOPA will continue addressing the emerging risks and challenges
affecting some unit-linked products, including in light of current high
inflation, and will eventually revise the methodology to reflect further
the supervisory experience.
Background
The methodology is a follow up of the Supervisory Statement on Value for Money which was published by EIOPA in November 2021.
EIOPA
© EIOPA
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