With the beginning of August this year, the Delegated Regulation (EU) 2021/1257 enters into force.
The regulation refers to the inclusion of sustainable development factors in the requirements for supervision and management of insurance investment products. For insurance companies, this means numerous changes and the need to adapt to the guidelines.
The regulation requires insurance companies and insurance intermediaries who provide advice to obtain messages from customers about their sustainability preferences. This should be applied to insurance investment products. After the analysis, insurers would have the possibility to propose „green” insurance investment products to customers.
However, the provision raises many doubts. The regulation introduces important changes in the activities of insurers. They concern inclusion of sustainable development factors in the product management system. In addition, they focus on the study of customers’ preferences regarding sustainability in the context of its distribution.
Uncertainty therefore surrounds what an analysis focusing on customer preferences in the discussed area is supposed to look like. It is also not sufficiently clear at what stage the study of customer preferences in the area of sustainability should take place. The question also arises as to whether research into customer preferences always makes sense.
Financial institutions criticise these ideas because they force the introduction of solutions that generate excessive costs. Besides, the regulations are not beneficial for customers. They will be subjected to unnecessary analysis even if the insurer does not offer „green” products. It is worth pointing out that practice shows that more information does not improve the understanding of insurance products.