The European Insurance and Occupational Pensions Authority (EIOPA) has published a consultation on its advice to the European Commission in respect of certain aspects relating to retail investor protection. The Commission ran a public consultation in 2021 on retail investor protection and fair treatment of customers. As part of this ongoing initiative the Commission sent EIOPA a ‘Call for Advice on specific issues relating to retail investor protection. This advice has now been published.
The Commission requested advice in six areas:
- Addressing and enhancing investor engagement with disclosures. EIOPA has identified unnecessary duplication (for example between Solvency II, PRIIPS and the IDD) and gaps (for example in respect of post-contractual disclosures) in the information to be given to retail customers.
- Drawing out the benefits of digital disclosures. EIOPA believes that consumer disclosures need to be presented in a radically simpler format.
- Assessing the risks and opportunities presented by new digital tools and channels. EIOPA has examined how disclosures can be made more fit for purpose in a digital context, for example using interactive capabilities and open platforms.
- Tackling damaging conflicts of interest in the sales process. This includes considering refining existing rules on inducements.
- Promoting an affordable and efficient sales process. EIOPA is looking at the current application of the demands and needs test and looking at how digitisation might help.
- Assessing the impact of complexity in the retail investment product market. EIOPA believes that it is difficult to identify measures to promote simpler Insurance Based Investment Products because different regulatory frameworks are applied to product complexity. EIOPA believes that further measures could be adopted to promote convergence.
Comments on the consultation are sought by 25 February 2022.