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European Insurance and Occupational Pensions Authority
News article29 April 20223 min read

EIOPA publishes advice on Retail Investor Protection


The European Insurance and Occupational Pensions Authority (EIOPA) has published today its Final Report with its advice to the European Commission on retail investor protection in relation to the sale of Insurance-Based Investment Products (IBIPs).

EIOPA’s main findings in the areas which the Commission asked EIOPA to address in its Call for Advice, are as follows:

1) Enhancing consumer engagement with disclosures, including digital disclosures

  • EIOPA sees scope for significantly reducing duplicative disclosures in the existing regulatory framework. To enhance existing periodic disclosures at EU level with regard to IBIPs, EIOPA recommends the idea of developing an “annual statement” to be disclosed to policyholders. Overall, EIOPA sees the need for a shift towards truly consumer-focused disclosures, built upon an enhanced supervisory framework, that fits the digital age. The starting point when designing consumer disclosures should be behavioural research and consumer testing.

2) Assessing the risks and opportunities presented by new digital tools and channels

  • At present, the market for digital tools and platforms selling IBIPs is limited to specific national markets, but EIOPA sees scope for a market for digital platforms selling IBIPs and for open insurance to develop further in the future under the appropriate regulatory framework and conditions.

3) Tackling damaging conflicts of interest in the sales process

  • EIOPA is of the view that more needs to be done to tackle damaging conflicts of interest arising throughout the product lifecycle. EIOPA has set out the pros and cons of a number of different policy options to regulate the payment/receipt of inducements. EIOPA considers improvements to the existing rules on inducements as being necessary, and believes a combination of different options could also bring specific benefits.

4) Promotion of an affordable and efficient sales process

  • EIOPA is of the view that more clarity is needed on the scope of the “demands and needs” test and suitability assessment. Simplifying the process for providing advice, particularly taking into account the ongoing digital transformation in the sale of financial products and further automation of the sales process, can bring benefits, but carries particular challenges. Further supervisory convergence work can help to ensure that the same rules for the advice process are applied proportionally across national markets.

5) Assessing the impact of complexity in the retail investment product market

  • EIOPA sees the need for more coherence in the current regulatory requirements to identify which products are complex. We would like to have a clearer notion of the objectives when considering product complexity and cost-efficiency of IBIPs and take due account of the level of complexity in the different stages of the product lifecycle and IBIP-related specificities. We have proposed some clarifications to existing requirements in the area of Product Oversight and Governance.

Petra Hielkema, Chair of EIOPA said: “It is crucial that consumers can actively participate in capital markets and have confidence in the investment decisions they take. This can only work in a safe environment, based on a clear and simple regulatory framework, which enables them to make informed choices. Improvements to the current framework are possible. We believe that our proposals will provide a good basis for the Commission to further develop it and thus achieve the objectives of its Retail Investment Strategy.”

View the advice


EIOPA’s Final Report is in response to a Call for advice, which the European Commission sent to EIOPA on 27 July 2021 and relates to the implementation of the Commission’s Capital Markets Union Action Plan and, more specifically, its Retail Investment Strategy, which aims to improve consumer outcomes and increase consumer participation in capital markets.

EIOPA ran a public consultation on its proposals from 28 January to 25 February 2022 and held a dedicated public hearing on 18 February 2022. In what was a compressed timeframe, EIOPA was given until 30 April 2022 to deliver its final advice.

”Insurance-Based Investment Products” (IBIPs) are insurance products that offer a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed to market fluctuations, directly or indirectly. Typical examples of IBIPs are unit-linked life insurance, with-profits life insurance and traditional life insurance products.

“Inducements” are monetary benefits, such as commissions or fees, or non-monetary benefits such as provision of hospitality services, which are paid or received in connection with the distribution of an insurance product, to or by any party except the customer or a person acting on behalf of that customer.


Publication date
29 April 2022