A ECJ judge this week confirmed that the management and sale of insurance bonds (single premium life assurance) to retail clients is an insurance activity. This includes stockpicking inside portfolio bonds and management and switching funds inside the bonds.  Sadly this doesn’t seem to apply in the UK – and IFAC have never understood why not.  But no providers would countenance it.

Nonetheless the ECJ court agreed with Advocate General Campos Sanchez-Bordona’s judgement on the matter handed down on 21 November 2017.  Bonds are not MIFID related.  With the insurance market having 85% plus of the investment advice market in the EU, the ruling confirms the status quo.  It also confirms what many in the UK suspect is happening with EU rules – now gold plated into UK rules.

Observing another quirk at the moment in the pensions industry – in Malta the pensions regulator is planning to rule on whether or not the Insurance or IDD licence allows firms to give investment advice when the funds are within a pension, even if the funds within a pension are within an insurance bond (most of them) – we find out in July.  

As seasoned EEA watchers will know, there is little real passporting in Financial services.  Insurance and investment both operation under different passports, so do branches and cross border, so do AR firms and principal firms and Pensions doesn’t passport at all.  Put bluntly it doesn’t work as we were told it would when Mrs Thatcher signed the Single European Act 1992.