Question ID: 2564 - Required precision of the insured sum information in the IPID
Regulation Reference: (EU) No 2016/97 - Insurance Distribution Directive
Topic: Insurance product information document / IPID (Art. 20 para. 7 and 8 IDD)
Article: 20
Status: Final
Date of submission: 25 Jan 2023
Question
For a large number of our products, we offer different tariff variants, which change the maximum sums insured accordingly.
E.g.:
Tariff A - accidental death - up to 50.000,-€
Tariff B - accidental death - up to 100.000,-€
How should the insured sum be displayed in the IPID?
Should there be a corridor specifying the sum insured e.g.:
"up to €50.000 € - 100.000 €" - (eats up a lot of space)
or
should the "highest tariff" sum insured be used e.g.:
"up to 100.000 €" - (could be misleading, when only tariff e.g. A is chosen)
On all our IPID's we referring to "agreed types of benefits and sums insured can be found in the insurance certificate".
In addition a table of benefits, that shows the insured sum for the respective tariffs, is provided.
I would be very pleased if you could help me with this.
EIOPA answer
Article 20(7) of the Insurance Directive Distribution (hereafter IDD) states: “(e) The insurance product information shall be accurate and not misleading” and “Member States may stipulate that the insurance product information document is to be provided together with information required pursuant to other relevant Union legislative acts or national law on the condition that all the requirements set out in the first subparagraph are met”. In addition, Article 20.8(b) prescribes: “the insurance product information document shall contain a summary of the insurance cover, including the main risks insured, the insured sum and, where applicable, the geographical scope and a summary of the excluded risks.” Finally, Article 6.1(c) of the Commission Implementing Regulation (EU) 2017/1469 underlines “the information on the insured sum referred to in Article 20(8)(b) of Directive (EU) 2016/97 shall be included under the heading ‘What is insured?”
In accordance with the strong necessity to have an accurate and not misleading IPID for the customer, the information relating to the insured sum should be displayed in the most precise way. In this respect, in the case of a non-life insurance contract for which the insurance manufacturer offers different options for the maximum sums insured, the information relating to the insurance sum could be presented under the heading “What is insured?” in the following way, for example:
This form of presentation is consistent with the main features of the non-life insurance product in terms of the different insured sums (minimum-maximum) which are offered according different options by the aforementioned product.
Please note that, in addition to this form of presentation, a reference to the contractual documentation can be also provided in accordance with article 20(7), first paragraph, g of IDD to give the customer the full customized information on the upper limits of the insured sum of the non-life insurance product in question.