Insurance Europe Comments on EIOPA Changes to Key Information Docs

Following the European Insurance and Occupational Pensions Authority’s (EIOPA) board of supervisors’ (BoS) approval of changes proposed by the European Supervisory Authorities (ESAs) to the key information document (KID) for packaged retail and insurance-based investment products (PRIIPs), William Vidonja, head of conduct of business at Insurance Europe, commented:

“It is deeply regretful that the EIOPA BoS has chosen to push forward with these flawed changes. While 75% of PRIIPs are insurance-based, the changes only seek to facilitate the application of the PRIIPs KID to Undertakings for Collective Investment in Transferable Securities (UCITS), and will make the PRIIPs KID significantly worse than it is now for consumers buying insurance-based products.

“The EIOPA BoS has chosen to approve a set of proposals that are identical to those that it had previously rejected in July 2020. Europe’s insurers are therefore interested to find out how the BoS has determined that the new proposals could benefit consumers in a way that the others could not.

“To be clear: the ESAs’ proposed changes to the PRIIPs KID will not work or deliver any benefits for consumers buying insurance-based products. The proposals will in fact make the PRIIPs KID much more complex, confuse consumers and further undermine their understanding of insurance-based investment products, as well as their trust in the information they receive. For example, the proposals include a presentation of performance that mixes past and future performance, as well as new indicators that make the different sections of the KID inconsistent.

“The Council of the EU and the European Parliament must therefore stop these ill-judged changes and call on the European Commission to address the shortcomings of the KID as part of the overall Level 1 PRIIPs framework review, based on a thorough impact assessment and consumer-testing. The recently launched Commission study on distribution and disclosures would provide a solid basis on which to rethink the approach on PRIIPs.”