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This is because the final draft PRIIPs Regulatory Technical Standards (RTS) submitted by the European Supervisory Authorities (ESAs) to the Commission, which provide for the standards to apply for the presentation, content, revision and delivery of the Key Information Document (KID), contain significant design faults.
In particular, the draft KID would misrepresent two important aspects of insurance-based investment products: how much they cost and the risk they pose to consumers.
Regarding cost, insurance-based investment products provide insurance protection to investors that other investments products do not include.
In terms of risk, the PRIIPs Regulation requires one indicator that consumers can easily understand. However, the methodologies which have now been used to derive this indicator for the KID are not fit for purpose and as a consequence could overstate the risk of insurance-based investment products.