The PRIIP regulation will come into force on 01 January 2018. It affects the financial service industry as a whole, as many financial firms do indeed sell one or more “packaged retail investment and insurance-based products” (PRIIPs) to retail clients within the EEA, while many other firms provide direct or indirect services for PRIIP manufacturers. For the insurance sector, the “insurance-based investment products” (IBIPs) form the products within the scope of this regulation. The PRIIP regulation aims to inform potential retail clients about the risk, reward and cost structure of all PRIIPs via the “key information document” (KID). This new document will include qualitiative and quantitative information about the PRIIP it represents.
Since the range of regulated products is very wide, the “regulatory technical standards” (RTS) do define four categories of products with similar properties, and give separate instructions for the calculation of the required figures for each category. Due to the nature of profit sharing mechanisms, German IBIPs will almost exclusively belong to category 4. While the other three categories have to comply with precise methods and formulas, the category 4 products must heed the following principle:
“The component of the PRIIP that depends wholly or partly on a factor or factors that are unobserved in the market shall follow robust and well recognised industry and regulatory standards for determining relevant expectations as to the future contribution of these factors and the uncertainty that may exist in respect of that contribution.”
This webinar will give an overview over the upcoming regulatory requirements of PRIIPs for insurers from a German point of view. In particular, it will introduce the industry standard that will be applied by the German insurance industry in order to calculate PRIIP information. The focus will be on the mathematical modelling and its implementation, as well as an explanation how the industry ended up using this standard.
Organised by the EAA - European Actuarial Academy GmbH.