The insurance investment products within the regulatory framework of the IMD2 proposal Athens - 8 May 2014 Prof. Ph.D. Pierpaolo Marano Professor of Insurance law Catholic University of the Sacred Heart Milan Prof. Ph.D. Pierpaolo Marano Professor of Insurance law Catholic University of the Sacred Heart Milan

Where Do You Get the Rules on IIP? MiFID2 PRIPs IMD2

A direct reference to PRIPs Regulation: Definition of IIP as IP under PRIPs Applies to all investment products intended for small investors but would not apply to: non-life insurance products; life insurance contracts where the benefits under the contract are payable only on death or in respect of incapacity due to injury, sickness or infirmity, or deposits other than structured deposits and securities. The new rules still need to be officially endorsed by the member states. They would then take effect within two years

An indirect reference to PRIPs Regulation: Documentation (KID) for retail investors "What is this investment?“ "Could I lose money?" "What is it for?“ "What are the risks and what might I get back?" "How has it done in the past?" "What are the costs?" “"What might I get when I retire?“ (pension funds only)

MiFID and IMD2: Are they the mother and daughter? Rules for IIP aligned with conduct of business rules included in MiFID II; Stricter conflicts of interest regime; Independent advice (no commissions) for IIP - based on developments of MiFID II proposal; Assessment of suitability and appropriateness test; Product governance EU Commission delegated acts – EIOPA’s Advice

MiFID2: Business conduct rules MiFID II will extend some of the information to clients and conflict of interest requirements to insurance-based investment products by amending the Insurance Mediation Directive 2002/92/EC.

Rules for investment advice The rules for investment advice are improved both when advice is provided on an independent basis and in the long term. Advisers declaring themselves as independent will need to match the client's profile and interests against a broad array of products available in the market and say whether they will provide the client with a periodic assessment of the suitability of advised products. Independent investment advisers and portfolio managers will be required to transfer all fees, commissions or any monetary benefits paid or provided by a third party to the client who should be accurately informed about all such commissions.

MiFID2:Product governance The involvement of senior management in the design of the firm's policies as to how products and services may be sold or provided to their clients and the adoption of adequate internal controls is consolidated.

MiFID and European Authorities MiFID II introduces harmonised powers and conditions for national competent authorities, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) [EIOPA?] to prohibit or restrict the marketing and distribution of certain financial instruments and structured deposits, financial activities or practices in case of threats to investor protection, financial stability or the orderly functioning of markets.