IDD: A MATTER OF INTEREST
The compliance with the European directive focuses on the specific proposition of insurance instruments (traditional life, unit-linked, multi-brand) so that the clients’ need for investments of this kind is clear, as well as specific knowledge, experience, and belonging to the target market; on the basis of this information, the advisor can assess the adequacy and compliance of the product and communicate a precise disclosure to the insurance intermediary or to the insurance company.
The enforcement of the directive guarantees customers the same level of protection regardless of the channel through which they purchase an insurance product and ensures consistency between the product and the evolution of customer needs.
CLIENT’S COMPLETE PROFILATION
The enrichment of the profiling questionnaire of the advisory platform Advice with the addition of a new specific section, dedicated to insurance products, of ad hoc questions aimed at collecting information related to the customer’s interest in this kind of product, knowledge / experience of the product itself and related risks, guarantees a well-defined and complete profilation.
The introduction in the suitability risk engine SURE of appropriate control logics aimed at assessing the compatibility of the customer toward the product and the belonging to the target market defined by the manufacturer / distributor for it, ensures the execution of an evaluation of complete suitability on all kinds of policies; the evaluation is carried out both in the case of initial subscription, ensuring the inclusion in portfolio only and exclusively of products that meet parameters defined on the basis of the risk profile computed for the customer, both qualitative, consisting of the verification of specific knowledge, experiences and needs of the customer with respect to those required for holding the product and adherence of the same customer to the parameters defined in the Target Market of the Distributor, both quantitative, represented by the values of market risks, credit and liquidity calculated with different methodologies and by the concentration percentage of instruments on the total portfolio on the basis of their complexity class as defined by MiFID II.
All checks are carried out also in the case of subsequent transactions on instruments already present in the portfolio, thus guaranteeing the identification of any unreliability attributable to pre-normative transactions and preventing the expansion of exposure to products not in line with the risk profile of the client.
TO PROTECT AND SERVE
The interaction between the two systems ensures an assessment both qualitative and quantitative that, when integrated into the suitability verification process defined on the basis of the principles established by MiFID II, further strengthens the protection of investors and facilitates the advisor in defining the most suitable investment to offer to the customer.