File #2772: "2019_Book_DistributionOfInsurance-BasedI.pdf"
Text
1|Preface|5
1|Contents|8
1|Part I: The EU Discipline|9
2|The Notion of Insurance-Based Investment Products|10
3|1 Introduction|11
4|1.1 Overview of the Legal Framework|11
4|1.2 MiFID and Insurance-Based Investment Products|13
3|2 Retail Investment Markets and Products|16
4|2.1 Retail Investment Products|16
4|2.2 Benefits and Risks for Retail Investors|19
3|3 Insurance-Based Investment Products as a Subset of Retail Investment Products|20
3|4 What Forms Can Insurance-Based Investments Take?|22
3|5 Towards a Legal Definition|23
4|5.1 General Remarks|23
4|5.2 Insurance Distribution Directive|24
4|5.3 Regulation 1286/2014 on Key Information Documents for Packaged Retail and Insurance-Based Investment Products. From PRIPs to PRIIPs|26
4|5.4 The Current Scope of PRIIPs Regulation|27
4|5.5 Types of Risks Inherent to PRIIPs|30
3|6 Final Remarks|31
3|References|32
2|The Legal Regime and the Relevant Standards|33
3|1 Historical Analysis and Perspective of the Substantial Rules on the EU Regulation of Insurance Based Investment Products|34
4|1.1 Brief Citation of the Main Legislation|36
4|1.2 The European Passport Process|38
3|2 The Route to Changes in the Financial Sector|39
4|2.1 The New European System of Financial Supervision|41
4|2.2 The Development of the EU Supervisory Structure|44
4|2.3 PRIIPs: Evolution and Role|45
4|2.4 A Cross-Sectoral Product Disclosures|46
3|3 IDD and the Client Protection|48
3|4 Non-complex Insurance-Based Investment Products|51
3|5 Conflicts of Interest Regulation|54
3|6 Inducements Regime|56
3|7 Assessment of Suitability and Appropriateness|58
3|8 Conclusions|61
3|References|62
4|Further Readinngs|63
2|The Product Oversight and Governance: Standards and Liabilities|65
3|1 Where do the Product Oversight and Governance (POG) Come From?|66
3|2 The Transposition of the POG Into the IDD|73
3|3 Who Is the Manufacturer?|75
3|4 The Product Approval Process|78
3|5 Product Designing|82
4|5.1 Target Market|82
4|5.2 Product Testing|84
3|6 Product Monitoring and Review, Remedial Actions|86
3|7 The Products with Environmental or Social Objectives|88
3|8 The Distribution Channels|90
3|9 The “Negative” Target Market and the Sales Outside the Positive Target Market (“Grey Area”)|92
3|10 Potential Compliance Gaps: FCA Thematic Review of Product Development and Governance|95
3|11 Are There New Liabilities from POG?|98
3|12 Is the Failure to Comply with POG an Unfair Commercial Practice?|100
3|References|102
2|ADR and Insurance-Based Investment Products|103
3|1 Introduction|104
3|2 The Development of ADR for Insurance-Based Investment Products in the EU|105
4|2.1 Overview|105
4|2.2 Competence of the EU|110
4|2.3 ADR in the UK for Insurance-Based Investment Products|111
4|2.4 ADR in France for Insurance-Based Investment Products|114
4|2.5 ADR in Germany for Insurance-Based Investment Products|115
4|2.6 ADR in Spain for Insurance-Based Investment Products|117
3|3 FIN-NET|118
4|3.1 Introduction|118
4|3.2 Membership of FIN-NET|119
4|3.3 Operation of FIN-NET|121
4|3.4 Evaluation of FIN-NET|123
5|3.4.1 Evaluation by the CSES|123
5|3.4.2 Lack of Awareness|124
5|3.4.3 Gaps in Coverage|125
5|3.4.4 Language|127
3|4 Conclusion|128
3|References|129
1|Part II: Liability in the Context of Distribution|132
2|France|133
3|1 Introduction: Sources of Insurance Law in France|134
4|1.1 The Main Sources of French Statutory Insurance Law|135
5|1.1.1 EU Law as a Primary Source of French Insurance Law|135
5|1.1.2 The Insurance Code, the Mutual Code and the Social Security Code|135
4|1.2 Case Law|136
4|1.3 The Role of the Supervisor|136
3|2 The Distribution of Investment-Based Insurance Products|137
4|2.1 Typology of Investment-Based Insurance Products in France|138
4|2.2 The Persons Involved in the Distribution Process|139
5|2.2.1 The Insurer|139
5|2.2.2 The Insurance Intermediary|140
5|2.2.3 The Special Case of Group Insurance Contracts|141
3|3 The Duty to Provide Information: Pre-contractual Information|142
4|3.1 Form and Content of the Pre-contractual Information|142
5|3.1.1 Provisions Applicable to All Insurance Contracts|143
5|3.1.2 Provisions Specific to Life Insurance Contracts|143
6|Option (i): Information Notice|143
6|Option (ii): Information Table|144
5|3.1.3 Information Specific to Unit-Linked Life Insurance|145
4|3.2 PRIIPS and the Key Information Document|146
4|3.3 Delivery of the Pre-contractual Information|146
3|4 The Duty to Provide Advice|147
4|4.1 Nature of the Duty to Provide Advice|147
4|4.2 The Distributor’s Duties|148
5|4.2.1 General Principle (Article L. 521-1 of the Insurance Code)|149
5|4.2.2 Conduct of Business Rules (Articles L. 521-4 and L. 521-6 of the Insurance Code)|149
3|5 Remedies|151
4|5.1 Specific Regime Applicable to Pre-contractual Information in Investment-Linked Life Assurance|151
4|5.2 Liability in Case of Breach of Duty|151
5|5.2.1 Legal Basis for the Claim Against the Insurer or the Intermediary|151
5|5.2.2 Loss of Opportunity: The Consequence of the Breach of Duty|152
5|5.2.3 Loss-of-Opportunity’s Compensation in Case of Breach of Duty|152
5|5.2.4 Quantification of the Loss of Opportunity|154
3|6 Conclusion|155
3|References|155
2|Germany|156
3|1 Introduction|157
4|1.1 Basic Information on Insurance-Based Investment Products in Germany|157
4|1.2 The Historic Development of Insurance-Based Investment Products in Germany|157
4|1.3 The Implementation of the EU Regulations in Germany|162
3|2 The Civil Liability of the Insurers and Insurance Intermediaries in Case of Distribution of Insurance-Based Investment Products|164
4|2.1 The Legal Framework for Liability in German Law: An Overview|164
4|2.2 The Evolution of the German Legal Doctrine on the Topic of Liability of the Insurers and Insurance Intermediaries|165
4|2.3 The Evolution of the German Courts Approach on the Topic of Liability of the Insurers and Insurance Intermediaries|167
4|2.4 The Claim for Compensation Under Applicable National Rules|169
5|2.4.1 The Basis of the Claim for the Liability of the Insurer|170
5|2.4.2 The Basis of the Claim for the Liability of the Insurance Agent and Insurance Broker|175
4|2.5 Liability Issues Regarding Insurance-Based Investment Products: Would the Liability of Insurance Intermediaries Remain Unregulated?|179
3|3 A Step Forward: The Possible Impact of the Implementation of IDD and PRIIPs on German Legal Doctrine and Courts Approach|180
3|4 Conclusion|182
3|References|184
2|Italy|186
3|1 Introduction: Insurance Intermediation in the Italian Legal System|187
3|2 The Near Future: Possible Scenarios for the Transposition of the “IDD”: Insurance Distribution Directive|191
3|3 The Notion of Insurance-Based Investment Products|192
3|4 The Liability of Insurance Intermediaries: Key Principles|196
3|5 The Distribution of Insurance-Based Investment Products: The Current Legal Framework in the Civil Code, Insurance Code and MiFID|199
4|5.1 Disclosure Obligations and Codes of Conduct for Insurance Intermediaries|200
5|5.1.1 The Notion of Insurance Suitability and the Parallel Notion in the Financial Sector|200
5|5.1.2 Diligence, Transparency and Fairness|204
4|5.2 Conflict of Interest|206
3|6 Information Obligations for Insurance-Based Investment Contracts in the Consolidated Financial Act|208
4|6.1 Pre-contractual Information|208
4|6.2 Classification of Clients|209
4|6.3 Suitability|209
4|6.4 Best Execution|210
4|6.5 Incentive System|210
4|6.6 The Rules on Conflicts of Interest|210
3|7 The State of the Art of the Italian Case-Law|211
3|8 Insurance-Based Investment Products: Perspectives Under IDD|214
3|References|216
2|Poland|217
3|1 Introduction|218
3|2 Specific Nature of Insurance Contract Regulations in the Context of the Scope of Legal Operations of an Insurance Company (Insurer) and an Insurance Mediator in Relation to the Distribution of Investment-Based Insurance Products|219
4|2.1 Explanation|219
4|2.2 The Essence of the Statutory Definition of Insurance Activity According to Polish Law|220
3|3 The Essence of Insurance Mediation and Liability in Relation to the Distribution of Investment-Based Insurance Products|221
3|4 A Catalogue of Insurance Activities|227
3|5 The Concept of Insurance Protection (Coverage) as the Effect of the Investment-Based Insurance Product|228
3|6 The Essence of Duties of the Agent as a Mediator|230
3|7 The Case of a Life Insurance Contract Related to the Unit-Linked Insurance|232
3|8 What Will Change in Poland After 1 October 2018?|235
4|8.1 Objective and Subjective Scope of the New Legislation|235
4|8.2 Casus of the General (Public) Good|236
4|8.3 Distribution in the Light of the IDA|236
4|8.4 Duties of the Insurance Distributor and His Responsibility|237
3|9 Conclusion|239
3|References|240
4|1. Sources of Law|240
4|2. Literature|241
2|The United Kingdom|242
3|1 Introduction|243
3|2 Insurance Regulation in the UK|243
4|2.1 EU Law|243
4|2.2 The Insurance Act 2015|244
4|2.3 Consumer Insurance (Disclosure and Representations) Act 2012|245
4|2.4 The FCA Handbook|246
5|2.4.1 General Information|246
4|2.5 Preparing for Introduction of PRIIPS and IDD|246
3|3 Distribution of IBIPS|248
4|3.1 Defining IBIPs in the UK|248
4|3.2 Those Involved in the Insurance Distribution Process|249
5|3.2.1 Insurer|249
5|3.2.2 Intermediary|249
3|4 Liability in the Context of Distribution|250
4|4.1 FCA Handbook|250
4|4.2 Private Person|250
4|4.3 Restricting Use of Section 138D (2) in Section 138D (3)|252
4|4.4 Section 138D|253
5|4.4.1 Causation|253
5|4.4.2 Remoteness|253
4|4.5 Tortious Liability|254
4|4.6 Duty of Care|255
3|5 Brexit|256
4|5.1 Impact of Brexit on UK Law: The Current Situation|256
3|6 Conclusion|258
3|References|258
4|Books|258
4|News|259
4|Consultations|259
1|Contents|8
1|Part I: The EU Discipline|9
2|The Notion of Insurance-Based Investment Products|10
3|1 Introduction|11
4|1.1 Overview of the Legal Framework|11
4|1.2 MiFID and Insurance-Based Investment Products|13
3|2 Retail Investment Markets and Products|16
4|2.1 Retail Investment Products|16
4|2.2 Benefits and Risks for Retail Investors|19
3|3 Insurance-Based Investment Products as a Subset of Retail Investment Products|20
3|4 What Forms Can Insurance-Based Investments Take?|22
3|5 Towards a Legal Definition|23
4|5.1 General Remarks|23
4|5.2 Insurance Distribution Directive|24
4|5.3 Regulation 1286/2014 on Key Information Documents for Packaged Retail and Insurance-Based Investment Products. From PRIPs to PRIIPs|26
4|5.4 The Current Scope of PRIIPs Regulation|27
4|5.5 Types of Risks Inherent to PRIIPs|30
3|6 Final Remarks|31
3|References|32
2|The Legal Regime and the Relevant Standards|33
3|1 Historical Analysis and Perspective of the Substantial Rules on the EU Regulation of Insurance Based Investment Products|34
4|1.1 Brief Citation of the Main Legislation|36
4|1.2 The European Passport Process|38
3|2 The Route to Changes in the Financial Sector|39
4|2.1 The New European System of Financial Supervision|41
4|2.2 The Development of the EU Supervisory Structure|44
4|2.3 PRIIPs: Evolution and Role|45
4|2.4 A Cross-Sectoral Product Disclosures|46
3|3 IDD and the Client Protection|48
3|4 Non-complex Insurance-Based Investment Products|51
3|5 Conflicts of Interest Regulation|54
3|6 Inducements Regime|56
3|7 Assessment of Suitability and Appropriateness|58
3|8 Conclusions|61
3|References|62
4|Further Readinngs|63
2|The Product Oversight and Governance: Standards and Liabilities|65
3|1 Where do the Product Oversight and Governance (POG) Come From?|66
3|2 The Transposition of the POG Into the IDD|73
3|3 Who Is the Manufacturer?|75
3|4 The Product Approval Process|78
3|5 Product Designing|82
4|5.1 Target Market|82
4|5.2 Product Testing|84
3|6 Product Monitoring and Review, Remedial Actions|86
3|7 The Products with Environmental or Social Objectives|88
3|8 The Distribution Channels|90
3|9 The “Negative” Target Market and the Sales Outside the Positive Target Market (“Grey Area”)|92
3|10 Potential Compliance Gaps: FCA Thematic Review of Product Development and Governance|95
3|11 Are There New Liabilities from POG?|98
3|12 Is the Failure to Comply with POG an Unfair Commercial Practice?|100
3|References|102
2|ADR and Insurance-Based Investment Products|103
3|1 Introduction|104
3|2 The Development of ADR for Insurance-Based Investment Products in the EU|105
4|2.1 Overview|105
4|2.2 Competence of the EU|110
4|2.3 ADR in the UK for Insurance-Based Investment Products|111
4|2.4 ADR in France for Insurance-Based Investment Products|114
4|2.5 ADR in Germany for Insurance-Based Investment Products|115
4|2.6 ADR in Spain for Insurance-Based Investment Products|117
3|3 FIN-NET|118
4|3.1 Introduction|118
4|3.2 Membership of FIN-NET|119
4|3.3 Operation of FIN-NET|121
4|3.4 Evaluation of FIN-NET|123
5|3.4.1 Evaluation by the CSES|123
5|3.4.2 Lack of Awareness|124
5|3.4.3 Gaps in Coverage|125
5|3.4.4 Language|127
3|4 Conclusion|128
3|References|129
1|Part II: Liability in the Context of Distribution|132
2|France|133
3|1 Introduction: Sources of Insurance Law in France|134
4|1.1 The Main Sources of French Statutory Insurance Law|135
5|1.1.1 EU Law as a Primary Source of French Insurance Law|135
5|1.1.2 The Insurance Code, the Mutual Code and the Social Security Code|135
4|1.2 Case Law|136
4|1.3 The Role of the Supervisor|136
3|2 The Distribution of Investment-Based Insurance Products|137
4|2.1 Typology of Investment-Based Insurance Products in France|138
4|2.2 The Persons Involved in the Distribution Process|139
5|2.2.1 The Insurer|139
5|2.2.2 The Insurance Intermediary|140
5|2.2.3 The Special Case of Group Insurance Contracts|141
3|3 The Duty to Provide Information: Pre-contractual Information|142
4|3.1 Form and Content of the Pre-contractual Information|142
5|3.1.1 Provisions Applicable to All Insurance Contracts|143
5|3.1.2 Provisions Specific to Life Insurance Contracts|143
6|Option (i): Information Notice|143
6|Option (ii): Information Table|144
5|3.1.3 Information Specific to Unit-Linked Life Insurance|145
4|3.2 PRIIPS and the Key Information Document|146
4|3.3 Delivery of the Pre-contractual Information|146
3|4 The Duty to Provide Advice|147
4|4.1 Nature of the Duty to Provide Advice|147
4|4.2 The Distributor’s Duties|148
5|4.2.1 General Principle (Article L. 521-1 of the Insurance Code)|149
5|4.2.2 Conduct of Business Rules (Articles L. 521-4 and L. 521-6 of the Insurance Code)|149
3|5 Remedies|151
4|5.1 Specific Regime Applicable to Pre-contractual Information in Investment-Linked Life Assurance|151
4|5.2 Liability in Case of Breach of Duty|151
5|5.2.1 Legal Basis for the Claim Against the Insurer or the Intermediary|151
5|5.2.2 Loss of Opportunity: The Consequence of the Breach of Duty|152
5|5.2.3 Loss-of-Opportunity’s Compensation in Case of Breach of Duty|152
5|5.2.4 Quantification of the Loss of Opportunity|154
3|6 Conclusion|155
3|References|155
2|Germany|156
3|1 Introduction|157
4|1.1 Basic Information on Insurance-Based Investment Products in Germany|157
4|1.2 The Historic Development of Insurance-Based Investment Products in Germany|157
4|1.3 The Implementation of the EU Regulations in Germany|162
3|2 The Civil Liability of the Insurers and Insurance Intermediaries in Case of Distribution of Insurance-Based Investment Products|164
4|2.1 The Legal Framework for Liability in German Law: An Overview|164
4|2.2 The Evolution of the German Legal Doctrine on the Topic of Liability of the Insurers and Insurance Intermediaries|165
4|2.3 The Evolution of the German Courts Approach on the Topic of Liability of the Insurers and Insurance Intermediaries|167
4|2.4 The Claim for Compensation Under Applicable National Rules|169
5|2.4.1 The Basis of the Claim for the Liability of the Insurer|170
5|2.4.2 The Basis of the Claim for the Liability of the Insurance Agent and Insurance Broker|175
4|2.5 Liability Issues Regarding Insurance-Based Investment Products: Would the Liability of Insurance Intermediaries Remain Unregulated?|179
3|3 A Step Forward: The Possible Impact of the Implementation of IDD and PRIIPs on German Legal Doctrine and Courts Approach|180
3|4 Conclusion|182
3|References|184
2|Italy|186
3|1 Introduction: Insurance Intermediation in the Italian Legal System|187
3|2 The Near Future: Possible Scenarios for the Transposition of the “IDD”: Insurance Distribution Directive|191
3|3 The Notion of Insurance-Based Investment Products|192
3|4 The Liability of Insurance Intermediaries: Key Principles|196
3|5 The Distribution of Insurance-Based Investment Products: The Current Legal Framework in the Civil Code, Insurance Code and MiFID|199
4|5.1 Disclosure Obligations and Codes of Conduct for Insurance Intermediaries|200
5|5.1.1 The Notion of Insurance Suitability and the Parallel Notion in the Financial Sector|200
5|5.1.2 Diligence, Transparency and Fairness|204
4|5.2 Conflict of Interest|206
3|6 Information Obligations for Insurance-Based Investment Contracts in the Consolidated Financial Act|208
4|6.1 Pre-contractual Information|208
4|6.2 Classification of Clients|209
4|6.3 Suitability|209
4|6.4 Best Execution|210
4|6.5 Incentive System|210
4|6.6 The Rules on Conflicts of Interest|210
3|7 The State of the Art of the Italian Case-Law|211
3|8 Insurance-Based Investment Products: Perspectives Under IDD|214
3|References|216
2|Poland|217
3|1 Introduction|218
3|2 Specific Nature of Insurance Contract Regulations in the Context of the Scope of Legal Operations of an Insurance Company (Insurer) and an Insurance Mediator in Relation to the Distribution of Investment-Based Insurance Products|219
4|2.1 Explanation|219
4|2.2 The Essence of the Statutory Definition of Insurance Activity According to Polish Law|220
3|3 The Essence of Insurance Mediation and Liability in Relation to the Distribution of Investment-Based Insurance Products|221
3|4 A Catalogue of Insurance Activities|227
3|5 The Concept of Insurance Protection (Coverage) as the Effect of the Investment-Based Insurance Product|228
3|6 The Essence of Duties of the Agent as a Mediator|230
3|7 The Case of a Life Insurance Contract Related to the Unit-Linked Insurance|232
3|8 What Will Change in Poland After 1 October 2018?|235
4|8.1 Objective and Subjective Scope of the New Legislation|235
4|8.2 Casus of the General (Public) Good|236
4|8.3 Distribution in the Light of the IDA|236
4|8.4 Duties of the Insurance Distributor and His Responsibility|237
3|9 Conclusion|239
3|References|240
4|1. Sources of Law|240
4|2. Literature|241
2|The United Kingdom|242
3|1 Introduction|243
3|2 Insurance Regulation in the UK|243
4|2.1 EU Law|243
4|2.2 The Insurance Act 2015|244
4|2.3 Consumer Insurance (Disclosure and Representations) Act 2012|245
4|2.4 The FCA Handbook|246
5|2.4.1 General Information|246
4|2.5 Preparing for Introduction of PRIIPS and IDD|246
3|3 Distribution of IBIPS|248
4|3.1 Defining IBIPs in the UK|248
4|3.2 Those Involved in the Insurance Distribution Process|249
5|3.2.1 Insurer|249
5|3.2.2 Intermediary|249
3|4 Liability in the Context of Distribution|250
4|4.1 FCA Handbook|250
4|4.2 Private Person|250
4|4.3 Restricting Use of Section 138D (2) in Section 138D (3)|252
4|4.4 Section 138D|253
5|4.4.1 Causation|253
5|4.4.2 Remoteness|253
4|4.5 Tortious Liability|254
4|4.6 Duty of Care|255
3|5 Brexit|256
4|5.1 Impact of Brexit on UK Law: The Current Situation|256
3|6 Conclusion|258
3|References|258
4|Books|258
4|News|259
4|Consultations|259