Insurance Europe, the federation representing insurance and reinsurance undertakings across the EU, issued last 5 December a briefing asking for “better, not more, information for consumers” as regards the new Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation and the Insurance Distribution Directive (IDD).
According to Insurance Europe, the new EU regulations, such as the PRIIPs and the IDD, have been developed on their own, without enough attention being paid to the effect of these rules when they are combined. This would lead to overload and duplication, meaning that “individuals will be swamped with information”. In this sense, it is right to say that the number of pieces of information that brokers will need to provide to consumers before selling them an insurance-based investment product will triple, due to the cumulative requirements of the PRIIPs Regulation, the IDD, the General Data Protection Regulation and the Solvency II Directive.
In these regards, Insurance Europe warns that “overloading people with information could simply confuse them, leading to ill-informed decisions and potentially, when a claim comes, unhappy consumers”. Too much information could also distract consumers from paying attention to the most important information they must receive in order to know which are their rights and contractual duties.
Insurance Europe suggests that policymakers should focus on real needs of consumers, in order to address what it labels as “inconsistency and duplication” and “that rules are appropriate for a digital future” –since the EU consumer protection rules are not taking into account that many people now like to buy insurance online.
Such a realistic, consumer-centric insurance regulation should be at the heart of the European Commission’s Better Regulation agenda. From now onwards, the Insurers’ federation suggests that any proposal passes through a series of checks to make sure that it actually benefits consumers, incurs minimum costs and does not create unintended side-effects.
Namely, these checks would include, inter alia, measuring both the direct and indirect impact that any individual proposal would have on the everyday life of consumers, assessing the impact on consumers of the proposal when it is combined with other existing or proposed rules, or making sure that the proposal is future- and tech-proof.
Consistent, coherent and well-designed EU consumer protection rules will enable individuals to compare products and make informed decisions, whereas a “truly consumer-centric” EU regulatory framework would allow insurers to satisfy their consumers’ need in the best way possible.