EU Retail Investment Strategy: no commission ban, but a client benefit test is coming

The most debated EU retail finance reform of recent years, the Retail Investment Strategy (RIS), has entered the home stretch. It directly affects insurers and intermediaries that sell insurance-based investment products: unit-linked, savings and investment life insurance.

Status

The package consists of two documents. The first is a directive amending several acts at once: MiFID II, IDD, Solvency II, and the UCITS and AIFMD directives. The second is a regulation amending the PRIIPs rules on the key information document (KID).

Legislative progress:

• 24 May 2023: European Commission proposal;
• 18 December 2025: political agreement between the Council of the EU and the European Parliament;
• June 2026: the final text was endorsed by representatives of the member states;
• 23 June 2026: the European Parliament's ECON committee backed the text (33 in favour, 23 against, 2 abstentions);
• 11 November 2026: indicative date of the plenary vote.

After publication in the Official Journal, member states will have 24 months to transpose the rules into national law, and the main rules will start to apply roughly 30 months later. For now, the document has not been finally adopted.

Commissions: ban dropped, inducements test introduced

The Commission originally proposed a partial ban on commissions. For insurance-based investment products, it covered execution-only sales and advice presented as "independent". The final text contains no partial ban: the member states rejected it.

Instead of a ban, the IDD will gain a new Article 29a, a single inducements test. A commission or other remuneration is permitted if:

• it is calculated transparently and delivers a tangible benefit to the client;
• it is proportionate to the value of the product and the service provided;
• it is not tied to sales volume thresholds and contains no "accelerators";
• for insurance-based investment products, a commission clawback mechanism is provided where necessary.

Remuneration is disclosed separately from other costs, and the client is told how it affects the final return. If remuneration is paid on an ongoing basis, the test must be met for the entire period the intermediary receives it. EU countries retain the right to introduce a full ban domestically. In five years, the Commission will assess how the new rules are working.

Value for money

Manufacturers, and in some cases distributors, must identify and quantify all product costs, including commissions, and assess whether they are justified given the return, features and target market. For insurance-based investment products, EIOPA supervisory benchmarks will serve as the reference point. National benchmarks are also allowed for four years after the rules take effect. A product that fails the assessment may not be approved for sale.

Marketing and the customer journey

The new Article 26a of the IDD sets requirements for advertising. It must be recognisable as advertising, fair, balanced in presenting benefits and risks, and suitable for the target audience. If a company works with financial bloggers ("finfluencers"), it must sign a written contract with them.

Insurers and intermediaries must keep their marketing materials, including those distributed by third parties, for up to seven years. National supervisors gain mystery shopping powers and measures against illegal online distribution.

What this means for intermediaries

• The commission model remains, but the size and structure of remuneration will have to be justified in writing.
• Sales volume bonuses on investment policies in their current form will effectively become impermissible.
• Expensive, high-commission products will come under close supervisory scrutiny.

For Kazakhstan, the reform shows the direction of European regulatory thinking in savings and investment life insurance. This is worth bearing in mind when discussing the new law "On the Insurance Market", in which the ARDFM announces the development of savings products and changes to the rules for intermediaries.