EIOPA publishes thematic review on monetary incentives and remuneration between insurers and providers of asset management services

EIOPA has published its thematic review on consumer protection issues in the unit-linked market emerging from the business relations between providers of asset management services and insurance undertakings. The review collected evidence from a sample of 1,800 underlying investment vehicles used by insurance undertakings in the structuring of unit-linked funds across 28 Member States.

The review looked closely into the following areas:
1. the existence, magnitude and structure of monetary incentives and remuneration;
2. the way in which insurance undertakings structure their unit-linked products;
3. measures taken or not taken by insurance undertakings to address conflicts of interest and act in the best interests of customers.

Some of the key findings are as follows:

  • monetary practices are widespread and significant , for example 81% of participating insurance undertakings received monetary incentives and remuneration;
  • less than 3% of unit-linked assets are directly managed by insurance undertakings; in-house asset managers;
  • 69% of undertakings do not disclose monetary incentives and remuneration received to policyholders
  • 25% of insurance undertakings do not have a formal process for selecting investment vehicles; and
  • sources of consumer detriment include no or poor monetary disclosure and poor investment outcomes.