Good supervisory practices for knowledge and ability of distributors of insurance products

The European Insurance and Occupational Pensions Authority (EIOPA) has
published today a Report (Link:
https://eiopa.europa.eu/publications/reports/index.html )on good
supervisory practices regarding knowledge & ability of distributors of
insurance products.

The Report sets out good supervisory practices in the form of high-level
principles that competent authorities should apply to all distributors of
insurance products. These are supplemented by indicative examples of what
a competent authority could require a distributor to demonstrate in terms
of knowledge and ability, thus allowing for flexibility to adopt a
proportionate approach at national level. For example, the Report
promotes:
• Appropriate knowledge (e.g. about legal aspects, consumer protection
requirements, tax regimes, markets and products) and ability (e.g. about
risk perception, underwriting process, claims procedures) for
distributors.
• Demonstration of ethical and professional conduct at all times, for
instance to consider the best interest of the consumer in circumstances
connected to the contract.
• Effective communication to the consumer regarding terms and conditions
of the contract, complaints-handling, risks and rewards of a strategy or
product, by using clear and comprehensible language.
• Provision of suitable and/or personalised recommendations and
adaptation of these to the evolving consumer situation and need.

EIOPA considers it good supervisory practice for a competent authority to
ensure there is appropriate oversight of continuous professional
development.






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