Clear separation of costs is integral in the key information document (KID) required for the packaged retail investment and insurance-based investment products (PRIIPs) regulation, in order for consumers to properly compare products, according to Insurance Europe.
The PRIIPs regulation is designed to improve consumer protection and improving consumer confidence as well as improving transparency and comparability of PRIIPs products.
It mandates that the KID should include costs associated with investment, however, according to Insurance Europe, this should not be bundled together with the insurance premium.
The report highlighted that insurance-based investment products can offer consumers investment opportunities and additional benefits which are secured by payment of an insurance premium.
It argues that it is in the interest of the consumer that the amount of the insurance premium is presented in a separate designated insurance section of the KID. This section should detail the insurance cover, benefits and biometric risk premium.
To insure transparency, a reference to this would be made in the cost section, and again in the performance scenario section.
According to Insurance Europe, if this separation is not made, then consumers will not be able to compare either costs or benefits of products, leaving the consumer at a disadvantage.
