The Association of British Insurers (ABI) has welcomed the European Commission’s (EC) decision to delay the application date of the Packaged Retail Insurance-based Investment Products (PRIIPs) regulation.
This follows the decision of the European Parliament to reject the secondary legislation (Regulatory Technical Standards, RTS) on the PRIIPs Key Information Document (KID).
According to the UK’s Financial Conduct Authority (FCA), the aim of the PRIIPs regulation is to encourage efficient EU markets by helping investors to better understand and compare the key features, risk, rewards and costs of different PRIIPs, through access to a short and consumer-friendly Key Information Document (KID).
The FCA explains PRIIPs applies to those who:
- manufacture PRIIPs
- advise on or sell PRIIPs
The FCA adds that a PRIIP manufacturer (or any other person who changes an existing PRIIP, such as a distributor) is also required to:
- prepare a KID for each PRIIP that they produce
- publish each KID on their website
Commenting on the PRIIPS delay by the EC, the ABI’s director of regulation, Hugh Savill, said: “The ABI is pleased with the announcement to delay the implementation of the PRIIPs Regulation by one year. This will give insurers the much needed time to implement the complex requirements. The ABI has continuously engaged with EU and UK policymakers on this and we welcome that they have recognised the need for a delay.”
Savill added: “While this situation should not have arisen in the first place, we now hope that the right changes are made to RTS. Otherwise, the KID will not be a useful and meaningful document for UK consumers. We will continue to work with the FCA and EIOPA to ensure that the consumer-friendly objectives of the Regulation can be met.”
Steven Cameron, pensions director at Aegon, said Aegon also welcomes the delay to PRIIPs disclosure requirements.
Cameron said: “The KID is now due to go live in January 2018, and as the UK will still be in the EU at that point, those products in scope will need to be compliant by then. We hope all parties will take the opportunity to step back and address the concerns raised to ensure the KID is a help, not a hindrance, to customer understanding.”