Article 2, paragraph 3, b), ii), of the Directive 2009/138/EC “Solvency II”

The answer to this question is provided by the European Commission.

Do capital redemption operations linked to investment funds comply with the definition of “capital redemption operations” as provided by article 2, paragraph 3, b) ii) of the Solvency II Directive?
 
As regards life insurance, Directive 2009/138/EC only applies to capital redemption operations in so far as they are subject to supervision by the authorities responsible for the supervision of private insurance.
 
In that context, capital redemption operations are to be understood as operations based on actuarial calculation whereby, in return for single or periodic payments agreed in advance, commitments of specified duration and amount are undertaken. The question does not give enough background to judge whether or not the product in question should be considered as capital redemption operation.
 
As regards non-life insurance, Directive 2009/138/EC does not apply to capital redemption operations as defined by the law in each Member State.
 
May these capital redemption operations fall under the scope of both the Directive n°2016/97 on insurance distribution (“IDD”) and the Regulation n°1286/2014 on key information documents for packaged retail and insurance-based investment products (“PRIIPs”) ?
 
Directive (EU) 2016/97 applies to natural or legal persons who are established in a Member State or who wish to be established there in order to take up and pursue the distribution of insurance and reinsurance products. If the product in question is an insurance product then the distribution of that product is consequently subject to the rules set out in Directive (EU) 2016/97.
 
Regulation (EU) 1286/2014 applies to PRIIP manufacturers and persons advising on, or selling, PRIIPs. PRIIPs are defined in point (3) of Article 4 of that Regulation. In particular, PRIIPs include insurance-based investment products (IBIPs). If the product in question is an IBIP or another type of PRIIP then the advising on, or selling of that product is consequently subject to the rules set out in Regulation (EU) 1286/2014.
 
It has to be noted that the definition of “insurance distribution” in point (1) of Article 2(1) of Directive (EU) 2016/97 entails the activity of advising, other work preparatory to the conclusion of contracts of insurance or concluding such contracts itself. As a consequence, persons involved in, for instance, advise on the sale of insurance-based investment products will be subject to both, the rules set out in Directive (EU) 2016/97 and in Regulation (EU) 1286/2014. 

The disclaimer provided by the European Commission:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies, in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.