The Prudential Control and Resolution Authority, the watchdog of the financial sector, indicated on Tuesday, May 31, that it wanted to continue the work of transparency of the fees charged for life insurance contracts and is attacking the remuneration of insurers.
The ACPR (the Prudential Control and Resolution Authority) is examining life insurance and more specifically the sharing of remuneration between policy managers. A desire to introduce more simplicity in the offer. How? By reflecting on the sharing of remuneration.
A marketplace agreement with market players
In his speech, Franois Villeroy de Galhau, President of the ACPR, explains: it is desirable to enlighten savers even more. The ACPR has recently endeavored to cross-reference the various parameters of the available offer: costs, yield, and nature of the media offered sale in units of account. The results, which call for greater simplicity in the offer and a reflection on the compensation sharingwill be discussed this summer with insurers.
Indeed, insurers are now pushing their customers to invest part of their payments in units of account that are more risky than the traditional euro fund. Supports that are more profitable and for which specific fees apply. In April, 39% of new sums paid on life insurance contracts concerned units of account, France Assureurs reported on Wednesday.
The ACPR’s recommendations will be published by next fall, alongside the measures adopted in dialogue with the market. For the Authority, the distribution and management of life insurance deserve fair remuneration for technical work, underlines Franois Villeroy de Galhau.
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A step already taken with the standardized table
A first step was taken on June 1 with the publication of a standard table summarizing the costs. A document that allows investors to obtain more transparency on entry fees as well as annual and one-time fees. As of July 1, the management fees for each unit of account will be available via another document on the insurers’ websites.
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The ACPR thus intends to continue this work of transparency on the subject of costs and their impact on savers. This issue is also part of a priority at European level. We intend, after exchange with the place, to effectively promote the best practices.
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