The European Insurance and Occupational Pensions Authority (Eiopa) has released a new report which says annuities should only be sold on an advised basis.
It was noted by the regulator that even in cases where an annuity is sold directly by the company, they ought to only be sold on an advised basis and should focus on the objectives of the customer to determine his or her standards and needs, reports FT Adviser.
Gabriel Bernardino, chairman of Eiopa, stated the report "identifies how consumer interests can be better protected as regards the sales of variable annuities and shows Eiopa's commitment towards consumer protection".
The annuities market has been in the news of late as rates have fallen over the course of the last few years and there is an ongoing debate about regulation of the sector and whether there is a need for new legislation to be introduced.
"I expect that insurance companies will seriously take into consideration these good practices and incorporate them in their practices of the variable annuity's disclosure and selling," said Mr Bernardino, who added Eiopa is intending to closely monitor and review the issue in the following years to see what impact has been made as a result.
The report from Eiopa also recommends advisers inform customers interested in purchasing annuities how the products work under different market conditions, as well as provide them with information about the legal and supervisory regime under which the firm operates.
According to a recent report by the Financial Times, many older people are not able to wait until annuity rates improve, which means they are being placed in a difficult position and jeopardising their financial future.
Individuals who want to learn more about this type of product may find using the annuities service from Key Retirement Solutions can help them see how much money they could receive.
Posted by David Hancock