EIOPA seeks views on a more proportionate and outcomes-focused supervision of sales of insurance-based investment products

The European Insurance and Occupational Pensions Authority (EIOPA) launched today a public consultation on its draft Supervisory Statement regarding a more outcomes-focused supervision of the sales process and pre-contractual disclosures of insurance-based investment products (IBIPs), within the existing regulatory framework. The objective of EIOPA’s Supervisory Statement is to help supervisors calibrate their engagement with insurance manufacturers and distributors by complementing compliance-based supervision – which continues to be the foundation for protecting consumers – with aspects related to the effective and proportionate application of requirements in practice.

EIOPA’s market monitoring and oversight work have identified several areas where existing consumer protection safeguards may not always operate as effectively as intended. These include: 

The draft Statement issued for consultation today aims to support a more proportionate and risk-based supervisory approach to IBIP sales requirements by asking national supervisors to consider whether sales processes and disclosures operate effectively and support informed consumer decision-making. 

The proposed approach aims to reduce burden and supports a simpler customer journey. It recognises that additional information, more extensive documentation or additional process steps do not necessarily improve consumer outcomes when sufficient and relevant information has already been obtained or provided. Instead, supervisory attention should focus on weaknesses that materially affect consumer understanding, decision-making or the effectiveness of the applicable safeguards.