EIOPA’s second Consumer Strategy Day held in Frankfurt on 4 December 2012 gathered around 200 participants. The event was opened by Gabriel Bernardino, Chairman of EIOPA, who gave a keynote speech underlining that the Consumer Strategy Day is now part of EIOPA’s general policy of enhancing transparency and maintaining appropriate accountability towards stakeholders. He emphasized that EIOPA is adding real value for consumers of insurance and pension products by raising the awareness of consumer rights and obligations and contributing to the development of a well-integrated market.
The purpose of the Consumer Strategy Day is to offer a forum for debates with stakeholders on important regulatory developments and topics on consumer trends. At the same time, the event provides EIOPA with an opportunity to obtain direct input from all interested parties and to exchange views and experience with representatives of consumer associations and industry.
At the event, EIOPA also reported on the achievements and progress made in the Authority’s work related to consumer protection and financial innovation. The presentation was followed by 3 moderated panel discussions, each of them addressing specific aspects of consumer protection:
I. Panel discussion on regulation of insurance intermediaries
The first panel discussion focused on a number of topics related to the regulation of insurance intermediaries in the light of the Commission’s IMD2 proposal, although it was stressed that the proposal also sought to broaden the scope to ensure consumer protection regardless of the distribution channel.
The Commission kicked off the panel by providing a summary of the IMD2 proposal and an update on the state of negotiations in the Council and European Parliament. Other panellists from the European Parliament, Industry and Consumer Associations presented their views on the goal of the regulation of insurance intermediaries and IMD2.
There followed an interesting debate around a number of issues such as striking the right balance between ensuring the appropriate regulatory treatment of remuneration of distributors and effectively managing conflicts of interest, coverage of comparison websites under IMD2 and the appropriate approach to tackling cross-selling (in particular, tying of insurance products to other financial products).
It was noted that there was a need, on the hand, to raise consumer awareness about these issues, but also, on the other hand, to empower consumers to make informed choices.
II. Panel discussion on Product Disclosures in Life Insurance
he second panel centered on the Commission’s proposal for a Key Information Document for Packaged Retail Investment Products (PRIPs) and the importance of an enhanced disclosure regime in a wider consumer protection context. At the outset the Commission explained the rationale for this initiative. Other panelists from the European Parliament, National Supervisory Authorities, Consumer Associations and Industry presented their views on the goals and the challenges of the proposed regulation. In addition, an update was provided on the preparatory work for the development of delegated acts and regulatory standards envisaged by the proposal.
Panelists agreed that meaningful disclosures are a key element in the efforts to ensure that consumers can take investment decisions on an informed basis, but they need to be complemented by other consumer protection measures. Some panelists suggested combining disclosures with suitability tests.
In relation to scope and the horizontal nature of the PRIPs initiative, discussions focused on insurance contracts and private pension products as they may require other disclosure standards than investment products.
III. Consumer Trends
The third panel started with an explanation of the methodology EIOPA has developed for collecting consumer trends. This enhanced methodology will be used as a basis for producing regular future consumer trends reports. It is a major step forward as it has been developed to collect both quantitative and qualitative information for analysis, trend identification and reporting. Data collection will be on a best efforts basis by member authorities.
There was also a discussion on comparison websites from the Danish FSA followed by a presentation on consumer trends in the German insurance market by Finanztest. Lastly, the UK FSA presented their experience on PPI.