At its annual conference, the ACPR reiterated its expectations regarding the marketing and remuneration of insurance products. In particular, it called on insurers to be more transparent about the excessive charges they apply. Three recommendations for professionals are due to be published in the course of 2023.
Penalizing entry and management fees
Last May, the Autorité de contrôle prudentiel et de résolution had already warned insurers about the fees charged on their life insurance policies, highlighting " particularly penalizing " entry and management fees.
At its annual conference on December 5, 2022, the ACPR once again called on industry professionals, pointing out that " the accumulation of high fees can, in some cases, cut short any hope of returns ".
" All the signs seem to indicate that a move on the part of professionals would be timely, if not necessary ," says ACPR vice-president Jean Paul Faugère.
A dialogue is underway between the French banking and insurance supervisory body and the industry federation France Assureurs.
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- Autorité de contrôle prudentiel et de résolution (@ACPR_actu) December 5, 2022
Philippine Baulier: "Life insurance costs and fees must be properly identified and quantified."
3 recommendations for insurers
The Autorité de contrôle prudentiel et de résolution has developed three points that will be the focus of particular attention in 2023.
Firstly, the ACPR points out that high fees weigh on savers' returns. As such, the authority does not rule out the possibility of issuing a recommendation aimed at achieving a better match between fees and returns on unit-linked products.
Secondly, the supervisor notes that the Insurance Distribution Directive (IDD) is not fully complied with in France.
However, "taking the customer's interests into account concerns the entire value chain ".
Insurance companies and brokers must ensure that they have systems in place to prevent conflicts of interest and better identify risks. As part of the revision of the DDA, several associations have put the question of insurance intermediaries' remuneration back at the heart of the debate.
Finally, with regard to loan insurance, the ACPR says it does not know the impact of abolishing the medical questionnaire for loan contracts of less than 200,000 euros.
However, it " regularly receives reports of practices that are far from compliant " and observes " very uneven rates of insurance delegation between banking networks ", stresses its vice-chairman.
These behaviors could give rise to recommendations in the course of next year. It will be up to the ACPR to clarify the issues of remuneration of intermediaries and distributors, equivalence with the group contract, examination deadlines and traceability of procedures.
Following the alert issued by the ACPR, France Assureurs has urged its members to step up their scrutiny of the rates offered to their customers. It has to be said that the fees applicable to insurance contracts are now more visible. In the meantime, policyholders can examine for themselves the reality of these fees, which impact on their performance.