03/01/2012 The European Federation of Investors (EuroInvestors) welcomes the opportunity to comment on the draft proposal for EIOPA’s Report on Good Practices for Disclosure and Selling of Variable Annuities (the “Report”). Firstly, EuroInvestors regrets that the questions for public consultation raised in this report are clearly targeted to the insurance industry and insurance distributors, and not to customer organizations. This is maybe due to a certain lack of representatives of customer organizations in the EIOPA stakeholder groups and task forces that have written this report and made the preceding studies. We hope and very strongly recommend EIOPA to involve more representatives of customer and savers organizations in its expert groups and committees following the example of the other European bodies. Secondly, we consider that VA products should be classified as PRIPs as should be all other more “traditional” classical and with profit life insurance products. There should be no difference of treatment or disclosure between those products which are purchased for investment or retirement purposes. In fact VA products offer a different approach from that of these traditional products, but the same objective of providing benefits for retirement. It is therefore very important to ensure a good level of comparability between these products when advising to the client and they should not be subject to significantly different rules. Therefore, we consider that EIOPA’s recommandations for VA products concerning products features, costs transparency, level of products charges, selling practice and intermediary due diligence, apply also to the other traditionnal life and annuities products. Nevertheless, we want to stress that VA products are very complex in the sense that they incorporate (or are a mix of) two different categories of life insurance products: traditional with profit or unit-linked on one hand and annuities on the other hand. It is therefore very important that these products should be sold only on an independent advise basis and that the risks inherent to these products in terms of negative real performance, consumption of capital at the beginning of the payoff period, if any be very clearly stated. In order to insure a satisfactory level of fairness and accuracy we would welcome the use of independent experts, actuaries or financial experts, who would assess the merits of these products for a small investor according to some predefined objectives. The EuroInvestors' reply is to be found also on the following EIOPA's website: https://eiopa.europa.eu/consultations/consultation-papers/2011-closed-consultations/october-2011/report-on-good-practices-for-disclosure-and-selling-of-variable-annuities/index.html.
Position paper:
CP11-007_Comments_EFI1326295868.pdf
