Insurance Europe: Why ESA’s proposed changes to PRIIPs RTS won’t work
29 January 2021
Insurance Europe has today issued a paper outlining the reasons why changes proposed by the European Supervisory Authorities (ESAs) to the regulatory technical standards (RTS) of the Packaged Retail and Insurance based Investment Products (PRIIPs) Regulation will not work or deliver benefits for consumers.
The ESAs and the European Commission are currently considering
whether to reintroduce proposed changes to the PRIIPs RTS that were
rejected by the European Insurance and Occupational Pensions Authority's
board of supervisors in July.
Rejecting the proposed changes was the right decision, and these flawed proposals should not be resurrected because:
- The rejected proposals included a confusing presentation of
performance that mixes past and future performance and that is not
comparable between different product types, particularly insurance-based
products.
- The rejected proposals also changed aspects of the presentation of
costs that were working well and replaced them with inconsistent cost
indicators which would make comparison between products impossible.
- The proposed changes to the presentation of multi option
products are over complicated and would not make it easier for consumers
to understand.
Furthermore, implementing these changes would result in a
significant administrative burden for insurance companies while
providing no benefits to their customers.
Instead of pursuing these proposals any further, legislators must
commit to a full level 1 review of the PRIIPs Regulation that addresses
the underlying problems with the PRIIPs key information document rather
than looking for quick fixes that would only undermine consumer
understanding.
Full paper
© InsuranceEurope
