The Association of International Life Offices (AILO), the representative organisation for life insurers operating cross border in the EU, has demanded changes to the European Commission’s proposed reform of the controversial packaged retail investment and insurance-based investment products (PRIIPs) introduction.
AILO said that it has been consistently involved with the development of PRIIPS since 2007, when it first appeared in the form of “substitute products”. But after it read the European Commission’s letter to the Joint Committee of the European Supervisory Authorities (Joint ESAs) regarding a “quick fix” to the rejected regulatory technical standards RTS and the solutions it proposes to the ESAs, it felt it had to intervene.
As reported, earlier this year the introduction of PRIIPs KID legislation was forced to be put forward by at least 12 months, after a landmark overruling decision by the EU Commission. Now AILO has seen the proposals to amend legislation it has sincere reservations about the appropriateness of the action, in particular its ‘gold plating’ plans.
“Our understanding is that the choice of a regulation as the instrument for PRIIPs was to ensure it would be impossible for any Member State (MS) to ‘gold plate’ or otherwise amend the Level 1 Regulation,” AILO said in a statement.
“Consequently, all market players and consumers could rely on clarity and consistency across all MS in the application of the Act and, fundamentally important for the success of the whole exercise, the resulting key information documents (KIDs)
“AILO is disappointed to note that, despite the intent to ensure no “gold plating” or amendment in any way of the Level 1 Regulation, the Commission itself seeks to do just that,” the statement added.
AILO believes that the EU Commission has “chosen to ignore” the “clear language” agreed by the co-legislators – the European Parliament, the Council and the Commission – in Article 6.3 of the PRIIPs Regulation, which it says “unambiguously enables sign posting for all underlying assets”.
The AILO “remains strongly” of the view that Article 14 of the RTS should be “deleted in its entirety” – along with these latest proposed amendments limiting manufacturers to use the UCITS KIID.
AILO said that has other concerns with the RTS which it says will be raised directly with EIOPA.
“We urge members of the European Parliament to oppose amendments which ignore and seek to overturn the democratically expressed views of the Parliament and reject again these poorly revised RTS and insist that the Commission adhere to the Level 1 Regulation as agreed with the Parliament, the Council and the Commission,” the AILO statement read.
AILO has been the main trade body for the cross-border insurance industry since 1987 and continues to strive to represent the interests of this sector.
AILO’s members companies offer multi-currency, tax-efficient life assurance products aimed at the international policyholder and medium to high net worth clients whose needs cannot be fully met by their domestic providers.
AILO aims to promote the cross-border life industry and to encourage professionalism and high standards amongst its Members through the provision of market, regulatory and taxation information.