BRUSSELS, Nov 9 (Reuters) - The European Commission said on Wednesday it would postpone by one year new European Union rules meant to protect investors in life insurance, funds and other retail financial products.
The rules are intended to help consumers across the EU compare products in what are often national markets dominated by mutual funds. They were due to come into effect next year.
But pressure from the European Parliament and EU states led to the delay until 2018 on the so-called packaged retail and insurance-based investment products, or PRIIPs. They said some elements of the reform might be misleading.
“To ensure legal certainty and a smooth implementation for consumers we are today proposing to extend the date of application by one year,” the commissioner in charge of financial services Valdis Dombrovskis said in a statement.
The new rules cover a 10 trillion-euro ($11.01 trillion) market and will force banks and insurers to use a standard “key information document”, or KID, to allow comparison of the products. The proposed rules will not be changed, only delayed, the Commission said.
The KID is supposed to be written on no more than three pages and use jargon-free language. They must accompany each savings product, derivatives and life insurance policy to show the buyer potential future performance and total costs.
European Parliament lawmakers objected to the proposed KID, which would replace a patchwork of documents given to customers for financial products. They said the new document used an adverse scenario for a product’s potential performance that was too optimistic.
$1 = 0.9082 euros Reporting by Francesco Guarascio, editing by Larry King