Following on from the speech by the EIOPA Chair in August which touched on value for money concerns in the unit-linked (UL) life insurance product market, EIOPA has recently published its methodology for assessing value for money in the UL life insurance market.
The methodology outlines a common European approach on how to identify UL products which offer poor or no value for money. The methodology sets out a layered approach, whereby national competent authorities (NCAs) will conduct a top-down analysis: a market wide assessment, an enhanced product analysis and an assessment of the product oversight and governance (POG) process and documentation.
As well as providing a minimum common approach for NCAs across the EU, the methodology should be of use for insurance manufacturers and distributors when implementing their POG policies and when performing their value for money assessments to determine whether their products are aligned with the target market's needs, objectives and characteristics.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.