Changes from report parliamentary committee draft to plenary report

AddedRecords of such identity referred to in point (f) shall contain the legal names, registered addresses, contact details and, where relevant, social media handle of the natural or legal persons involved.

Added8. The Commission shall be empowered to adopt a delegated act in accordance with Article 38 to supplement this Directive by specifying:

Added(a) the essential characteristics of insurance-based investment products to be disclosed in all marketing communications targeting retail customers or potential retail customers and any other relevant criteria to ensure that those essential characteristics appear in a prominent way and are easily accessible by an average retail customer, regardless of the means of communication;

Added(b) the conditions with which marketing communications and marketing practices of insurance-based investment products should comply in order to be fair, clear, not misleading, balanced in terms of the presentation of the advantages, costs and risks, and appropriate in terms of content and distribution channels for the target audience or, where applicable, the target market.’;

Added(19) in Article 28, paragraph 2 is replaced by the following:

Added‘Where organisational or administrative arrangements made by the insurance intermediary or insurance undertaking in accordance with Article 27 to manage conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to customer interests will be prevented, the insurance intermediary or insurance undertaking shall clearly disclose to the customer the general nature or sources of the conflicts of interest, in good time before the customer is bound by an insurance contract or offer.’;

Added(20) Article 29 is replaced by the following:

Added'Article 29

AddedInformation to customers and policyholders

Added1. Without prejudice to Article 18 and Article 19(1) and (2), Member States shall ensure that insurance intermediaries and insurance undertakings distributing insurance-based investment products provide customers or potential customers in good time before the customers are bound by an insurance contract or offer, with appropriate information in personalised form about the insurance-based investment products proposed to those customers. That information shall contain all of the following:

Added(a) where advice is provided;

Added(i) whether or not the advice is provided on an independent basis;

Added(ii) whether the advice is based on a broad or on a more restricted analysis of different types of insurance-based investment products and, where applicable, underlying investment options, and in particular, whether or not the range is limited to products and assets manufactured or provided by entities having close links with the insurance intermediary or insurance undertaking, or any other legal or economic relationships, such as contractual relationships, so close as to pose a risk of impairing the independent basis of the advice provided;

Added(iii) whether the insurance intermediary or insurance undertaking will provide the customer with a periodic assessment of the suitability of the insurance-based investment product recommended to that customer;

Added(iv) where the insurance intermediary or insurance undertaking provides independent advice to a retail customer, whether the range of insurance-based investment products that are recommended is restricted or not to well-diversified, non-complex (as referred to in Article 30(3)) and cost-efficient insurance-based investment products only;

Added▌

Added(b) a description of the main features of the proposed insurance-based investment product and, where applicable, any recommended underlying investment options and investment strategies, including appropriate guidance on, and warnings of, the risks associated with the insurance-based investment product and, where applicable, the recommended underlying investment options or in respect of particular investment strategies followed by that product;

Added(c) information on the proposed insurance cover, including details of the insurance benefits and options and the circumstances that would trigger them, and, where applicable, a summary of the excluded risks and exclusions, where claims cannot be made;

Added(d) information on all explicit and implicit costs, associated charges and third-party payments, including all costs and charges relating to the distribution of the insurance-based investment product, and the cost of advice, where relevant, how the customer may pay for it and the duration of payments;

Added(e) the law applicable to the contract and the competent jurisdiction;

Added(f) general information on the tax rules applicable to the type of insurance-based investment product.

AddedThe information referred to in the first subparagraph, point (d), shall be accompanied by an appropriate explanation, in a standardised and comprehensible language for a retail customer, on the impact of the costs, charges and any third-party payments on the expected return.

AddedMember States shall ensure that insurance intermediaries and insurance undertakings present the information on all costs, charges and third-party payments referred to in the first subparagraph, point (d) in aggregated form to enable the customer to understand the overall cost and the cumulative effect on the return of the investment. The overall cost shall be expressed in monetary terms and percentages calculated over the term of the insurance-based investment product. Insurance intermediaries and insurance undertakings shall inform clients explicitly of their right to request an itemised breakdown of that information and they shall provide such an itemised breakdown at the request of the client.

AddedIf the disclosure of third-party payments cannot be ascertained at the pre-contractual stage, the method for calculating the amount shall be clearly disclosed to the client in a manner that is comprehensible and accurate for a retail client. Insurance intermediaries and insurance undertakings shall also provide their clients with information on the exact amount of the third-party payments received or paid on an ex-post basis.

AddedThe third-party payments paid or received by the insurance intermediary or insurance undertaking in connection with the provision or distribution of the insurance-based investment product shall be itemised separately. The insurance intermediary or insurance undertaking shall disclose the cumulative impact of such third-party payments, including any recurring third-party payments, on the net return over the term of the insurance-based investment product. The purpose of the third-party payments and their impact on the net return shall be explained in a standardised way and in a comprehensible language for an average retail customer.

Added2. Member States shall ensure that manufacturers of insurance-based investment products draw up a concise personalised document containing key information to be provided annually to each retail customer holding the product (‘annual statement’).

AddedThe exact date to which the information in the annual statement refers shall be stated prominently.

AddedThe information in the annual statement shall be accurate and up to date.

AddedManufacturers shall make the annual statement available to each retail policyholder free of charge through electronic format. A paper copy shall be provided upon request in addition to any information available through electronic means.

AddedThe annual statement does not need to be provided where the manufacturer provides its retail policyholders with access to an online system, which qualifies as a durable medium, where up-to-date statements with the relevant information set out in paragraph 3 can be easily accessed and the manufacturer has evidence that the retail policyholder has accessed those statements at least once during the previous 12 months.

Added3. The annual statement shall include, at least, the following key information:

Added(a) the total costs associated charges and third-party payments, expressed in an itemised way in monetary terms and percentages, paid or borne, directly or indirectly, by the retail policyholder over the previous 12 months and on a compounded basis since the start of the contract term in connection with the insurance-based investment product;

Added(b) the annual performance of each of the underlying investment options of the insurance-based investment product and the annual global performance of the portfolio, each compared with past performance over previous years:

Added(c) the total taxes including stamp duty, transactions tax, withholding tax and any other taxes where levied by the insurance undertaking, with a split per tax, borne by the retail customer in connection with the insurance-based investment product;

Added(d) where applicable, the market or estimated value when the market value is not available of the underlying investment options of the insurance-based investment product;

Added(e) payments made by the retail policyholder with regard to the insurance-based investment product including investments, deposits, contributions, premiums and fees, over the previous 12 months, deducting any withdrawals made;

Added(f) ▌projections of the expected outcome at the end of the contractual or recommended holding period, based on the current value of the investment and its performance development so far and linked to the pre-contractual performance scenarios in the key information document provided for in Regulation No 1286/2014, and a disclaimer that those projections may differ from the actual final value of the investment;

Added(g) information on the conditions and financial consequences of an early termination of the investment or switching of providers, including the surrender value and conditions for surrendering the insurance policy;

Added(h) a short summary on the insurance cover, in particular the insurance benefits and any options and information on what happens when the insured person dies or another insured event occurs;

Added(i) in the case of insurance-based investment products for which the policy terms and conditions provide for periodic premium reviews, the projected premiums required to maintain existing protection benefits until the ages of 55, 65, 75 and 85.

AddedWithout prejudice to the requirements in this paragraph, where sufficient information is not available on a specific product to draw up an annual statement, the requirements with respect to the annual statement shall only be applicable contracts concluded after the entry into force of Directive .../... [insert the number of this amending Directive].

Added4. The information described in paragraph 1 and the annual statement referred to in paragraphs 2 and 3 shall be provided to retail customers and policyholders by using a Union standardised terminology and format. Without prejudice to the manufacturer providing its retail policyholders with access to an online system in accordance with Article 29(2), fifth subparagraph, layering of the information required under paragraphs 1, 2 and 3 of this Article, whereby detailed parts of the information can be presented through pop-ups or through links to accompanying layers, shall be permitted where the annual statement is provided in an electronic format. In that case, it shall be possible to print the annual statement as one single document.

AddedEIOPA shall, after having consulted ESMA and after conducting consumer testing and industry testing, develop draft regulatory technical standards to specify the following:

Added(a) the relevant format for the provision of the information listed in paragraphs 1 and 3, including the form and the length of the document, and the content of each of the elements of information;

Added(b) the ▌standard▌ terminology and brief and concise related explanations to be used by insurance undertakings and insurance intermediaries for the disclosure of the information listed in paragraphs 1 and 3. The explanations shall ensure that they are likely to be understood by any retail customer without specific knowledge on insurance-based investment products;

AddedEIOPA shall submit those draft regulatory technical standards to the Commission by [OJ: insert date 18 months after the date of entry into force].

AddedPower is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards ▌in accordance with Article 10 of Regulation (EU) No 1094/2010.

Added5. Member States shall ensure that insurance intermediaries and insurance undertakings distributing insurance-based investment products display appropriate warnings in information material, including marketing communications, provided to retail customers to alert them on the specific risks of potential losses carried by particularly risky or complex insurance-based investment products and, where applicable, underlying investment options.

AddedEIOPA shall, by [18 months after the entry into force of the amending Directive], develop, and update periodically, guidelines on the concept of particularly risky or complex insurance-based investment products, taking due account of the specificities of the different types of insurance-based investment products.

AddedEIOPA shall develop regulatory technical standards to further specify the format and content of such risk warnings, taking due account of the specificities of the different types of insurance-based investment products and types of communications, including the specificities of multi-option products (MOPs).

AddedEIOPA shall submit those regulatory technical standards to the Commission by [OJ: insert date 18 months after the date of entry into force].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the third subparagraph in accordance with Article 10 of Regulation (EU) No 1094/2010.

AddedNational competent authorities shall monitor the ▌application of risk warnings ▌. In case of concerns regarding the use, or absence of use ▌of such risk warnings▌, that may have a material impact on the investor protection, ▌competent authorities ▌may impose the use of risk warnings by insurance intermediaries and insurance undertakings distributing insurance-based investment products.’;

Added(21) the following Articles 29a and 29b are inserted:

Added‘Article 29a

AddedInducements

Added▌

Added2. Member States shall ensure that insurance undertakings or insurance intermediaries, when distributing insurance-based investment products in accordance with Article 30(1), only receive or pay fees or benefits from or to a third-party on the condition that those insurance intermediaries or insurance undertakings ensure that the reception or payment of such fees or benefits does not impair compliance with their duty to act honestly, fairly and professionally in accordance with the best interests of their customers. Insurance intermediaries and insurance undertakings shall disclose the existence, nature and amount of such third-party payments in accordance with Article 29.

Added3. Member States shall ensure that insurance intermediaries and insurance undertakings shall, where applicable, inform the customer on mechanisms for transferring to the customer any fee, commission, monetary or non-monetary benefit received in relation to the distribution of the insurance-based product.

Added4. Member States may impose stricter requirements on insurance intermediaries and insurance undertakings in respect of the matters covered by this Article. In particular, Member States may ▌prohibit or ▌restrict the offer or acceptance of fees, commissions or non-monetary benefits from third parties in relation to the provision of insurance advice.