The regulatory requirements for Insurance-Based Investment Products (IBIPs) are constantly evolving. These products, which are at the heart of the insurance sector, impose strict requirements in terms of transparency and monitoring. To better understand the implications of these obligations, we interviewed Paula Leite, Managing Partner at VINCEO SOLUTIONS, who recently published an in-depth analysis on the subject.

For readers wishing to delve deeper into the subject, Paula’s full article is available here: read the article.

Paula, what are IBIPs and why do they require periodic reporting?

An IBIP, or Insurance-Based Investment Product, is an insurance product that is exposed, directly or indirectly, to market fluctuations. This includes in particular unit-linked investment life insurance policies. Because of their complexity, these products require rigorous monitoring. The periodic report is intended to guarantee total transparency for customers and to provide an accurate account of transactions, associated costs and services rendered.

What should Luxembourg insurance intermediaries bear in mind?

Intermediaries must provide this report at least once a year on a durable medium, such as paper or electronically. They must include key information, such as transactions carried out, services provided, associated costs and the value of the underlying assets. If a periodic assessment of the product’s suitability is planned, the report must also demonstrate how the product meets the customer’s preferences and objectives.

Is this requirement the same in all EU countries?

Well, not exactly. Although the IDD directive harmonises certain rules at European level, each Member State can introduce specific national features. For example, in Belgium, ‘branch 21’ type products without profit sharing are considered as IBIPs. Intermediaries operating internationally must therefore comply with local and European regulations.

How can the periodic report go beyond a simple regulatory obligation?

It can become a real loyalty-building tool. By adding elements such as personalised advice, updates on market trends or tax reminders, intermediaries show that they really care about their customers. It’s also an opportunity to consolidate the relationship by offering a global view of the contracts taken out.

What practical advice would you give to intermediaries?

I recommend working closely with insurers to ensure that you have the information you need to draw up the report. Also remember to structure the document clearly and concisely so that it can be understood by customers, even for complex products.

SUPPORT FOR APCAL MEMBERS

In order to help its members meet this obligation while saving time, APCAL is providing a model periodic report free of charge. This document has been designed to comply with Luxembourg regulatory requirements while remaining adaptable to each situation.

To find out more on this subject, we also invite you to consult Paula Leite’s full article, available here: read the article, which provides a detailed analysis and practical advice for professionals in the sector.

For more information, don’t hesitate to contact the APCAL at info@apcal.lu !