Insurance Europe has provided responses to EIOPA’s consultation on the creation of a standardised Pan-European Personal Pension Product (PEPP). Insurance Europe responded to the 21 questions seeking views on issues such as the authorisation requirements for PEPP providers, investment options under PEPPs and balancing the desire of PEPP holders to switch products with the maintenance of funding for long- term illiquid investments. Insurance Europe welcomes the long term nature of the proposed PEPP as a personal retirement savings product and its aim of providing a retirement income for European citizens. In its response it emphasises the importance of ensuring an appropriate level of consumer protection both in terms of the sales process and the level of security afforded to policyholders. The PEPP would need to allow providers to generate long-term liabilities, meaning consumers must be incentivised to save long term.

Although an additional stand-alone authorisation process for PEPP providers was not considered necessary by Insurance Europe, it did warn against the potential for a “race to the bottom” whereby PEPP providers establish themselves in member states with the lowest regulatory requirements. The potential for differential treatment across member states in a number of areas including taxation and also member state treatment of switching between PEPPs and national pension products were highlighted as potential issues.

Minimum investment periods should achieve the objective of PEPPs providing a long-term savings strategy for PEPP holders. Insurance Europe recommends that PEPP providers be permitted to design the number and length of the minimum investment periods embedded in their products.

EIOPA’s consultation period on PEPPs ended on 5 October 2015.

A link to the press release is here.