The European Parliament has published a study: “Alternatives to invest their Compensation Schemes and their Impacts”.

This study investigates whether private insurance contracts can be a substitute to investment compensation schemes (ICS). Starting by describing the scope of events/administrative malpractice, operation error and bad advice which are covered by ICS, the study continues to analyse whether existing insurance products offer cover for this.

The authors then analyse the economic advantages and disadvantages, costs and legal challenges of partially and/or fully substituting ICS with private insurance. Finally, they investigate the consequences of taking out insurance for systolic risk and comment whether transparency towards investors is beneficial.