FIN-FSA surveyed the quality of customer information provided with investment baskets – comparison of investment baskets difficult based on information provided
In spring 2014, FIN-FSA surveyed the quality of customer information provided with investment baskets related to unit-linked life insurance savings policies, pension insurances, and capitalisation agreements. A summary of the observations has been prepared for the purpose of helping companies to develop their information and to prepare for the new regulation on information on retail investment products (the so-called PRIIPs regulation), entering into force in 2016.
Based on a survey undertaken by FIN-FSA, the Authority finds it difficult to compare investment baskets on the basis of the customer information provided with the baskets, or compare the characteristics of investment baskets with the characteristics of investment funds.
According to FIN-FSA's view, the customer should get a clear picture of the legal nature, investment policy, risks and costs of the product from the customer information provided with the investment baskets. Most insurance companies disclose the above-mentioned characteristics in their customer information, but the information is often provided in many different documents or the nature of the information is very general.
The regulation of investment funds requires that fund management companies prepare a fund prospectus and a clear key investor information document disclosing the key characteristics of the investment fund. These requirements do not pertain to investment baskets, which for the time being fall under the duty of disclosure as referred to in the Insurance Contracts Act.
An investment basket is an investment product owned by an insurance company, and the value of a unit-linked insurance can be bound to the value development of such an investment basket. From the customer's point of view, investment baskets are investment products similar to investment funds or index-linked bonds.
For further information, please contact
- Mr Antti Lampinen, Market Supervisor, tel. +358 10 831 5518
- Ms Merja Junnonen, Legal Adviser, tel. +358 10 831 5554
Appendix
Published in English on 4 June 2014.