Insurance Europe sets out recommendations for the Retail Investment Strategy (RIS) next phase

The Retail Investment Strategy (RIS) moves to the next phase, and the recent European Commission's (EC) Call for Advice to EIOPA sets an ambitious workplan on the future Level 2 measures.

The RIS aims to strengthen consumer protection and encourage greater retail participation in the EU financial markets. While the Level 1 agreement contains a number of positive elements, the upcoming technical work will be critical to ensuring that these improvements are delivered in practice without adding unnecessary complexity for insurers and consumers.

Insurance Europe published a new paper setting out its recommendation, calling on the EC and the European Supervisory Authorities to keep simplification, proportionality and competitiveness at the heart of the implementation process. In particular, the paper identifies three priorities:

• Keep Level 2 & 3 targeted and practical, avoiding new concepts, requirements or unnecessary layers of prescription beyond what is needed to implement the Level 1 text.
• Simplify the consumer journey, making full use of the new light suitability test and the simplification of the PRIIPs Key Information Document (KID).
• Make disclosures work, through proper consumer testing, flexible disclosure templates and editable blueprints for insurance companies.

The paper also sets out more detailed messages on the inducement test, the light suitability regime and the simplification of the PRIIPs KID, with the aim of ensuring that the Level 2 & 3 measures remain workable and practical, while preserving the political balance reached by the EU co-legislators.

Read the paper here