The European Insurance and Occupational Pensions Authority (EIOPA) has published official translations of guidelines under the IDD relating to insurance-based investment products (IBIPs) which incorporate a structure that makes it difficult for the customer to understand the risks involved.
In so doing, the guidelines seek to minimise risks of consumer detriment arising from mis-sold IBIPs. They include criteria to identify product features difficult for the customer to understand. They intend to set a suitable framework to allow for “execution-only” sales of products, where an assessment of the suitability or appropriateness of an IBIP for the customer does not need to be carried out by the insurance intermediary or undertaking as part of the sales process.
Publication of the guidelines, translated into all official EU languages, starts a two month period during which competent authorities need to confirm whether they comply or intend to comply with the guidelines.