European (re)insurance federation calls for IMD to recognise differences across EU
The European Commission’s proposed changes to insurance broker rules must demonstrate a clear benefit to consumers, a pan-European insurance trade body says.
Insurance Europe, which represents insurers and reinsurers writing business across Europe, is keen to ensure that the proposed changes help customers make informed choices and do not over-burden Europe’s insurance industry.
The Commission is planning to revise the EU Insurance Mediation Directive and regulate the sale of packaged retail investment products (PRIPs).
Insurance Europe director general Michaela Koller said: “What we must ensure overall is that the Commission’s proposals have a demonstrable benefit for consumers. The information that customers are given before they buy a product must be instrumental in helping them to make their decision.
She added: “Simply adding an additional layer to current levels of pre-contractual information could otherwise confuse consumers rather than encouraging them to focus on key factors, such as the insurance coverage provided. The proposals must also be workable and not place disproportionate costs or administrative burdens on the industry, as they could, in turn, have a negative effect on the market and the products available.”
On the IMD in particular, Insurance Europe is calling for any revisions to the differences in the way insurance products are currently distributed in EU markets. It says the differences are due to the varying needs of consumers in different countries.
The association said: “Any legislative changes need to be thoroughly tested to ensure that they are flexible and proportionate enough to accommodate this diversity.”
Insurance Europe said it supports transparency about the potential conflicts of interest and the remuneration of insurance distributors as long as it helps consumers to understand products, but it argues the transparency must be proportionate and focus on the needs of the consumer. Likewise, consumers should be able to purchase products without advice, should they choose to do so.
Insurance Europe also stressed the importance of consistency in financial services legislation and the need to avoid cumulative conduct of business rules for insurance investment products.
The comments come as the European Insurance and Occupational Pensions Authority (EIOPA) holds its Consumer Strategy Day.