The European Insurance and Occupational Pensions Authority (EIOPA) has published technical advice (EIOPA-15/135) on conflicts of interest in direct and intermediated sales of insurance-based products to the European Commission, following an earlier consultation

The technical advice concerns possible delegated acts under Article 13c (3) of the Insurance Mediation Directive (amended by Article 91 of the amended Markets in Financial Instruments Directive.

The technical advice sets out a summary of the comments received in the consultation and the main conclusions EIOPA has drawn in light of the feedback. The advice is intended to assist the Commission on possible future implementing legislation.

The technical advice covers:

• Identification of conflicts of interest: EIOPA recommends requiring insurance intermediaries and insurers to assess all cases where they have an interest related to distribution which is distinct from the customer’s interest and which has the potential to influence the outcome of the services to the detriment of the customer;
• Conflicts of interest policy: EIOPA recommends requiring insurance intermediaries and insurers to establish and set out in writing an effective conflicts of interest policy. At the same time, EIOPA acknowledges the importance of proportionality, especially with regard to the impact new organisational requirements may have for small and midsize intermediaries; and
• Inducements and remuneration: EIOPA notes that conflicts of interests can arise from third party payments (inducements) and internal payments (remuneration). EIOPA is of the opinion that this issue should be addressed. An accompanying letter from Gabriel Bernardino, EIOPA Chairman, to Jonathan Faull, European Commission Director General for Internal Market and Services, states that analysis relating to national approaches to the mitigation of remuneration conflicts of interest is underway already.

Copies of the:

technical advice; 

letter; 

press release