The Polish Financial Supervision Authority (“PFSA”) just now adopted the product intervention assumptions in respect of unit-linked insurance product.

By way of a reminder – the product intervention powers are referred to in Article 17 of the PRIIPs Regulation and can take a form of prohibition/restriction of:

  • the marketing, distribution or sale of insurance-based investment products; or
  • a type of financial activity or practice of an (re) insurance company.

The PFSA’s assumptions concern a restriction on the possibility of marketing, distributing and selling unit-linked insurance with unacceptable parameters such as:

  • the lack of any real benefits for investors from the purchase of a unit-linked insurance product measured by rate of return;
  • investing in assets which are high-risk, have low liquidity and have limited transferability (this resembles PFSA’s official standpoint on the insurance investment products dated 17 July 2019 in relation to investing in closed-end investment fund certificates);
  • ambiguous and unclear information about fees.

According to the PFSA, offering unit-linked insurance with the above features may result in PFSA’s decision on product intervention. Such an intervention would be aimed at eliminating this type of insurance from the offer of insurance companies.

Further steps are to include PFSA’s consultations with selected supervision authorities of the EU Member States, EIOPA, and the insurance sector itself. Works on the PFSA’s product intervention are to be completed by Q2 2020 at the latest.