Insurance Distribution Directive (IDD)

Insurance Distribution Directive (IDD)

Background

The IDD introduces new rules on insurance distribution. It came into force on 23 February 2016 and must be implemented into the national laws of the EU Member States by 23 February 2018. The IDD repeals the Insurance Mediation Directive (IMD) and is a minimum harmonisation Directive. In other words, Member States, as they transpose the IDD into national law, cannot do less than what is required under the Directive but they may introduce additional measures if they deem it necessary to ensure the protection of consumers in their market. Insurance intermediaries who are already registered under the IMD have until February 2019 to comply with their respective and relevant provisions of national law implementing IDD knowledge and ability requirements (IDD Articles 40 and 10.1).

The IDD seeks to improve regulation in the retail insurance market and create more opportunities for cross-border business, to establish the conditions necessary for fair competition between distributors of insurance products and to strengthen consumer protection, in particular with regard to the distribution of insurance-based investment products.

The IDD empowers the Commission to adopt four binding Delegated Acts (DAs) to further specify some of its provisions with regard to Product Oversight and Governance (POG), conflicts of interest, inducements and assessment of suitability and appropriateness and reporting. The IDD empowers the Commission to adopt one implementing technical standard (ITS) regarding a standardised format of the Product Information Document (PID). The IDD also empowers the Commission to adopt regulatory technical standards (RTS) reviewing the minimum amounts of PII / financial capacity. EIOPA has to develop the draft DAs, ITS and RTS. The IDD empowers EIOPA to adopt various level 3 measures and to carry out other reports and studies (see below).


  • The IDD: its main features

    • Scope
  • The IDD covers the distribution of not only non-life and life products, reinsurance products, but also insurance-based investment products (IBIPs).
  • The IDD applies to insurance distributors, i.e. insurance intermediaries, insurance undertakings and ancillary intermediaries. The IDD (unlike the IMD) expressly applies to certain activities conducted through price comparison websites.
  • The IDD applies to ancillary intermediaries, i.e. service providers and distributors of goods who distribute insurance products on an ancillary basis. Those ancillary intermediaries are excluded from the IDD where the insurance they sell covers the risk of breakdown, loss of or damage to the goods or non-use of the service or covers damage to or loss of baggage and other risks linked to travel booked with that provider; and where the amount of the premium for the insurance product does not exceed €600 on a pro rata annual basis. In circumstances where the insurance is complementary to the good or service and the duration of that service is equal to or less than three months, the amount of the premium paid per person should not exceed €200.
  • Limiting the impact of the exemptions on consumer protection, the IDD states that any insurer or intermediary using the services of an exempted ancillary insurance intermediary will have the obligation to ensure that the latter complies with a series of information and conduct requirements.

    • Product Oversight and Governance (POG)

BIPAR views: the IDD’s much wider scope (than the IMD one) ensures a level playing field and adequate consumer protection. However, from a consumer protection perspective, exemptions from the IDD scope could have been further limited. The IDD scope fails to cover – and therefore to correctly regulate and supervise - the insurance distribution activities of many ancillary intermediaries. It could exclude most of the insurance distribution activities of the travel or car rental industry. Member States should go for a wider scope when implementing the IDD scope.

  • The IDD introduces product oversight and governance requirements for insurance undertakings and intermediaries which manufacture insurance products (a process for the approval of each insurance product, identified target market consistent with intended distribution strategy, review of insurance products and information of distributors).
  • It also includes some requirements for insurance distributors who propose products that they do not manufacture (to have adequate arrangements to obtain appropriate information on insurance products, to understand the characteristics and identified target market of each insurance product)
  • POG requirements do not apply to insurance products which consist of insurance of large risks.

    • New information requirements

BIPAR views: The IDD places POG requirements mostly on “insurance undertakings, as well as intermediaries which manufacture any insurance product” -and not on intermediaries that do not manufacture products. As stated in IDD Recital 72, it is crucial that the proportionality principle applies to Delegated Acts’ requirements imposed on insurance distributors. Member States should ensure not to impose too prescriptive requirements on insurance intermediaries who do not manufacture products, and in particular for non-life or pure risk life insurance products. Too prescriptive rules could result in a less innovative, less flexible, less consumer-friendly market.

  • For the sake of better consumer protection, insurance distributors will have to act honestly, fairly and professionally in accordance with the best interests of their customers. In particular, they cannot make any arrangements by way of remuneration or sales target that could provide an incentive to recommend a particular product to a customer when they could offer a different product that would meet the customer’s needs better.
  • Before the conclusion of the contract, consumers will be provided with clear information about the professional status of the person selling the insurance product and about the nature of remuneration which he will receive. This does not apply for large risks and for reinsurance distribution activities. Member States may limit or prohibit the acceptance or receipt of fees, commissions or other monetary or non-monetary benefits paid or provided to insurance distributors by any third party, or a person acting on behalf of a third party, in relation to the distribution of insurance products.
  • The IDD introduces a detailed standardised Insurance Product Information Document (IPID) for all non-life insurance products (see below).
  • Where advice is provided, the insurance distributor has to provide the customer with a personalised recommendation explaining why a particular product would best meet his customer’s demands and needs. Member States can make the advice mandatory for the sales of any insurance products. Important to note is that the Directive explicitly states that distributors operating under Freedom of Establishment (FOE)/Freedom of Services (FOS) in Member States where advice is mandatory, will have to comply with that stricter provision when concluding contracts with consumers having their habitual residence in that Member State.

    • Cross-selling rules

The IDD introduces new rules regarding cross-selling: where the insurance product is the ancillary product to a good or service, the good or service should be allowed to be purchased separately from the insurance (i.e. ban on tying). The IDD does not prevent the distribution of insurance products which provide coverage for various types of risks. The IDD requires that where the insurance product is the main product and is sold with an ancillary product or service that is not insurance, the customer is informed of whether the components can be bought separately.


    • Cross-border activities

  • More clarification is given in the IDD on the division of competence between the home and host Member States. Broadly speaking, when the intermediary is passporting on a FOS basis, its home Member State is responsible for ensuring compliance with all IDD requirements. When the intermediary is operating on a FOE basis, the host State concerned is responsible for ensuring compliance with IDD information and conduct of business requirements. Its home Member State is responsible for everything else.
  • All intermediaries are subject to relevant “general good” provisions that the host State may impose. Any Member State which possesses additional “general good" type rules will need to ensure that these are made publicly available.

BIPAR views: The IDD allows all consumers to receive relevant, clear and meaningful information, so that they can take an informed decision about their insurance products. For non-life insurance and for pure risk life insurance, any additional disclosures at national level would result in distortion and weakening of competition of which ultimately consumers will be the victim. It would also lead to a distraction of consumers away from the relevant information regarding their insurance policy such as levels of coverage, levels of service, policy exclusions or total premium.

A pure fee-based market, for example, would exclude many people from access to any level of advice or assistance in their search for an adapted insurance product. EU Member States should not avail themselves of the option given in the IDD to limit or prohibit the acceptance or receipt of fees, commissions or other monetary or non-monetary benefits paid or provided to insurance distributors by any third party, or a person acting on behalf of a third party, in relation to the distribution of insurance products. In any case, any decisions of Member States to go beyond the IDD should always be under the condition of a level playing field between all distribution channels, non-distorted competition and proportional administrative burden.

The IDD introduces new rules regarding cross-selling: where the insurance product is the ancillary product to a good or service, the good or service should be allowed to be purchased separately from the insurance (i.e. ban on tying). The IDD does not prevent the distribution of insurance products which provide coverage for various types of risks. The IDD requires that where the insurance product is the main product and is sold with an ancillary product or service that is not insurance, the customer is informed of whether the components can be bought separately.

  • More clarification is given in the IDD on the division of competence between the home and host Member States. Broadly speaking, when the intermediary is passporting on a FOS basis, its home Member State is responsible for ensuring compliance with all IDD requirements. When the intermediary is operating on a FOE basis, the host State concerned is responsible for ensuring compliance with IDD information and conduct of business requirements. Its home Member State is responsible for everything else.
  • All intermediaries are subject to relevant “general good” provisions that the host State may impose. Any Member State which possesses additional “general good" type rules will need to ensure that these are made publicly available.

    • Continuous Professional Development (CPD)

  • BIPAR views: The IDD does not describe the triggering elements of the FOS and FOE activities of an intermediary. This is a missed opportunity. This would have helped in further clarifying what general good rules and stricter information requirements of the host Member State may have to be complied with by the intermediaries when they are considered as carrying out FOS/FOE activities in that Member State. It would also have created more legal clarity in identifying the relevant supervisor in cross-border situations. EIOPA should update its Luxembourg protocol on the issue as soon as possible.

  • The IDD requires Member States to have mechanisms to assess knowledge and competence of intermediaries, employees of intermediaries and of undertakings based on at least 15 hours of CPD per year (courses, e-learning, mentoring etc.). The nature of the products sold and the role of or the activity carried out by the person following the training have to be taken into account.
  • Member States may require that the successful completion of the training and development requirements is proven by obtaining a certificate.
    • IBIPs regime

BIPAR views: BIPAR promotes CPD but it must be noted that CPD requirements have the potential to be a demanding charge, particularly for SMEs. The real impact will depend on how these requirements are implemented at national level. Proportionality is key in this respect.

  • The IDD contains a specific chapter with additional requirements for insurance-based investment products (IBIPs) distributed by insurance undertakings and intermediaries, meaning that they come on top of the requirements in the general part of the Directive.
  • Intermediaries and undertakings have to take (proportionate) arrangements to prevent conflicts of interest from adversely affecting the interests of their customers and must take steps to identify them. If the taken arrangements are insufficient to ensure that the risk of damage will be prevented, there is a requirement of disclosure of the general nature or sources of conflicts of interest in good time before the conclusion of the contract.
  • For IBIPs, there will also be a Key Information Document (KID) according to the PRIIPs Regulation.
  • The IDD does not contain a provision as the one in MiFID II on independent advice linked to a ban on commission. Regarding independent advice Member States may require the assessment of a sufficiently large number of products available on the market that are adequately diversified.
  • The IDD allows benefits if there is no detrimental impact on the quality of the service and it is not against the criteria to act honestly, fairly, professionally, and in accordance with the best interests of customers. The IDD explicitly foresees the possibility for Member States to go beyond (e.g. prohibition of commissions, return to the client). Member States have the possibility of introducing mandatory advice. Any stricter requirements have to be respected in case of FOS and FOE.

BIPAR views: No ban on commission or fees has been introduced for insurance-based investment products (IBIPs). BIPAR welcomes this situation as every intermediary has the right to be fairly remunerated for his or her services. A pure fee-based market for example would exclude many people from access to any level of advice or assistance in their search for an adapted investment/ insurance product. When implementing the IDD, Member States should not go beyond these requirements and not do a copy paste of MiFID II requirements.

  • The IDD: its level 2 and 3 measures
    • IDD Delegated Acts (DAs)
  • The IDD: implementation by EU Member States - BIPAR monitoring

The IDD empowered the Commission to adopt Delegated Acts to specify regulatory requirements on:

- Product Oversight and Governance Arrangements (Article 25, IDD)

- Management of Conflicts of Interest (Articles 27 and 28, IDD)

- Inducements (Article 29, IDD)

- Assessment of Suitability and Appropriateness and Reporting to customers (Article 30, IDD)

In February 2016, the Commission requested EIOPA for its technical advice on the preparation of IDD DAs. Building on the comments received from the industry - including BIPAR - on its draft technical advice, EIOPA submitted its final technical advice to the Commission on 1 February 2017. The Commission is expected to adopt its four Delegated Acts by the summer of 2017. After adoption by the Commission, the EP and Council will have scrutiny rights on the DAs and may decide to ask EIOPA and the Commission to redraft them if not in line with the IDD text (level 1). DAs are binding for Member States, which will have to implement them by 23 February 2018, the IDD implementation deadline.


EIOPA Technical Advice on IDD Delegated Acts


- Product Oversight and Governance Arrangements (POG) - For any insurance products

POG arrangements apply to manufacturers and distributors designing and distributing any insurance products. POG arrangements aim to ensure that the interests of the customers are taken into consideration throughout the life cycle of an insurance product. EIOPA states that they need to be proportionate to the level of complexity and the risks related to the products, as well as the nature, scale and complexity of the manufacturer or distributor.

EIOPA's proposals for insurance undertakings and intermediaries which manufacture products

  • Design: Manufacturers must maintain, operate and review POG arrangements
  • Target market: Manufacturers identify the target market for each insurance product at a sufficiently granular level and specify the group of customers for whom the product is compatible.
  • Product testing: Before a product is brought to the market manufacturers must conduct appropriate testing of the product in order to align the product with the interests of the target market.
  • Distribution channels: Manufacturers must select distributors that have the knowledge to understand the product features, the characteristics of the target market and to correctly place the product in the market.
  • Information of the distributor: Manufacturers must provide distributors with all appropriate information on the product and the product approval process, including the identified target market of the insurance product.
  • Remedial action: Manufacturers must ensure that distributors act in compliance with the manufacturer’s POG arrangements. When not the case, the manufacturer must take appropriate remedial action.
  • Insurance intermediary considered as manufacturers: If the intermediary has a decision-making role in designing and developing an insurance product (the design of tailor-made contracts at the request of one customer is not considered as an activity of manufacturing), a written agreement with the insurance undertaking issuing the insurance product must be defined, clarifying their collaboration and their respective roles. The undertaking issuing the insurance product remains fully responsible to the customer for the coverage provided, while the latter and the manufacturer independently remain responsible for complying with the POG arrangements of a manufacturer.
  • Outsourcing: The manufacturer has full responsibility for compliance with POG arrangements when it designates a third party to design products on its behalf.

EIOPA's proposals for insurance distributors which propose products which they do not manufacture

  • Establishment of product distribution arrangements: Distributors must (in a written document) establish product distribution arrangements that set out appropriate measures for considering the products and services they intend to offer to their customers, for reviewing the arrangements and for obtaining all relevant information on the product(s) from the manufacturer(s).
  • Obtaining all relevant information on the insurance product from the manufacturer: The product distribution arrangements must ensure that distributors obtain all relevant information which has to be provided from the manufacturer on the insurance product, the product approval process, the target market and the distribution strategy. This includes information on the main characteristics of the insurance product, its risks and costs, as well as circumstances which may cause a conflict of interest to the detriment of the customer.
  • Distribution strategy: Where distributors set up or follow a distribution strategy, it shall not contradict the distribution strategy and the target market identified by the manufacturer of the insurance product.
  • Informing the manufacturer: If distributors become aware of problems causing the risk of customer detriment regarding the target market for a specific product, or that a given product no longer meets the criteria of the identified target market, they must inform the manufacturer and update the distribution strategy.
  • Documentation: Actions taken by distributors in relation to the product distribution arrangements shall be duly documented, kept for audit purposes and made available to the authorities on request.

- Management of Conflicts of Interest (IBIPs)

For the purposes of identifying conflict of interest, EIOPA proposes that insurance intermediaries and undertakings take into account, by way of minimum criteria, any of the following situations:

  • The insurance intermediary, undertaking, or any person directly or indirectly linked to them by control, is likely to make a financial gain, or avoid a financial loss, to the detriment of the customer;
  • The insurance intermediary, undertaking, or any person directly or indirectly linked to them by control, has a financial or other incentive to favour the interest of another customer or group of customers over the interests of the customer;
  • The insurance intermediary, undertaking, or any person directly or indirectly linked to them by control, receives or will receive from a person other than the customer a monetary or non-monetary benefit in relation to the insurance distribution activities provided to the customer;
  • The insurance intermediary, persons working in an insurance undertaking responsible for the distribution of insurance-based investment products or linked person, are substantially involved in the management or development of insurance-based investment products, in particular if they have an influence on the pricing of those products or its distribution costs.


Conflict of interest policy

  • General principle: Insurance intermediaries and insurance undertakings must establish, implement and maintain an effective conflicts of interest policy set out in writing and appropriate to their size and organisation and the nature, scale and complexity of their business.
  • Content: The conflicts of interest policy must identify, with reference to the specific insurance distribution activities carried out, the circumstances which constitute or may give rise to a conflict of interest entailing a risk of damage to the interests of one or more customers. It also must specify procedures to be followed and measures to be adopted to manage and prevent such conflicts from damaging the interests of the customer of the insurance intermediary or undertaking, as follows:

(a) effective procedures to prevent or control the exchange of information between relevant persons engaged in activities involving a risk of a conflict of interest where the exchange of that information may damage the interests of one or more customers;

(b) the separate supervision of relevant persons whose principal functions involve carrying out activities on behalf of, or providing services to, customers whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the insurance intermediary or undertaking;

(c) the removal of any direct link between payments, including remuneration, to relevant persons principally engaged in one activity and payments, including remuneration to different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities;

(d) measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out insurance distribution activities;

(e) measures to prevent or control the simultaneous or sequential involvement of a relevant person in insurance distribution activities where such involvement may impair the proper management of conflicts of interest.


- Inducements (IBIPs)

Under the IDD, insurance undertakings and intermediaries are required to consider whether an inducement or inducement scheme may have a detrimental impact on the quality of the relevant services to clients in the context of the distribution of IBIPs. EIOPA proposes to introduce a methodology which is based upon a high level principle by which "an inducement or inducement scheme has a detrimental impact on the quality of the relevant service to the customer if it is of such a nature and scale that it provides an incentive to carry out insurance distribution activities in a way which is not in accordance with the best interests of the customer."

  • Methodology and criteria for assessing the detrimental impact: The methodology proposed is based upon an analysis that takes into consideration all relevant factors which increase or decrease the risk of detrimental impact on the quality of the relevant service to the customer. EIOPA gives a non-exhaustive list of criteria (inducement encouraging intermediaries or undertakings to recommend a product when others would better meet the customer's needs, value of inducement is disproportionate, inducement solely or predominantly based on quantitative commercial criteria, inducement entirely or mainly paid upfront etc). EIOPA explains that the list is not supposed to introduce a legal assumption of detrimental impact and that the objective of the list is not to introduce a de facto prohibition on the receipt/payment of inducements.
  • Organisational requirements: Insurance undertakings and intermediaries must establish, implement and maintain appropriate organisational arrangements in order to assess on an ongoing basis and ensure that the generic inducement paid for a particular type of contract and the structure of inducement schemes which they pay to or receive, do not lead to a detrimental impact on the quality of the service provided to customers and do not prevent the insurance intermediary or undertaking from complying with their obligation to act honestly, fairly and professionally and in accordance with the best interests of their customers.

- Assessment of Suitability and Appropriateness and Reporting to customers (IBIPs)

Under the IDD, distributors providing advice have to provide suitable personal recommendations regarding insurance-based investment products to their customers or potential customers. Suitability has to be assessed against the customer’s knowledge and experience, financial situation and investment objectives. EIOPA has further developed these requirements in its technical advice:

  • Information to be collected to assess suitability:
  • Information to be collected to assess both suitability and appropriateness:

Without prejudice to the demands and needs test, the insurance undertakings or intermediary must obtain from the client the following information:

  • Financial situation: Source and extent of regular income, assets, including liquid assets, investment and real property, regular financial commitment, person's ability to bear losses
  • Investment objectives: person's risk tolerance, information on the length of time for which the customer wishes to hold investment, preferences regarding risk taking, risk profile, purposes of the investment

The intermediary or undertaking has to take reasonable steps to ensure that the information about the customer is reliable. If an intermediary or undertaking does not obtain the information that is needed for a suitability test, they shall not provide advice. When providing advice and none of the products is suitable, they shall not make a recommendation.

  • Knowledge and experience in the investment fields: Types of services, transaction, IBIPs which the customer is familiar with, nature, volume and frequency of the customer's transaction in IBIPs and period over which they have been carried out, level of education as well as profession
  • Retention of records obligation: Insurance intermediaries or undertakings must keep an orderly record of the information obtained where they are required to produce a suitability statement or to assess appropriateness. The EIOPA advice provides detail on the content and format of these records.
  • Criteria to assess non-complex IBIPs: Under the IDD when a sale regarding a non-complex product is carried out – and only on the initiative of the customer- Member States may decide not even to require an appropriateness test to be conducted. In order to apply the exemption for non-complex IBIPs, EIOPA suggests a list of five criteria. Further criteria will be provided in EIOPA level 3 guidelines (see below).

An IBIP is considered as non-complex if it fills the following criteria:

  • The contractually guaranteed minimum surrender and maturity value is at least the amount of premiums paid by the customer minus legitimate costs levied
  • It does not incorporate a clause, condition or trigger that allows the insurance undertaking to materially alter the nature, risk or pay out profile of IBIPs
  • There are options to surrender or otherwise raise the IBIP at a value that is available to the client
  • It does not include any explicit or implicit charges that could make the surrendering of IBIPs unreasonably detrimental to customers
  • It does not in any other way incorporate a structure which makes it difficult for the customer to understand the risk involved

BIPAR key issues with regard to EIOPA Technical Advice on IDD Delegated Acts (DAs)

  • IDD DAs (level 2) must respect the framework of the EU legislative text (IDD - level 1) agreed by the European Parliament and the Council
  • DAs are of significant importance for businesses. Planning the necessary technical and organisational changes is difficult without knowing the final content of the DA. However, the 4 IDD DAs are not expected to be published and adopted before September 2017. This leaves little time for Member States to implement them by 23 February 2018. This timeline is simply unrealistic considering the structural changes the IDD will trigger, both in national legislation and in practice.
  • As stated in Recital 72 of the IDD, it is crucial that the proportionality principle applies to DA requirements imposed on insurance distributors, in particular SMEs, and to the exercise of supervisory powers.
  • IDD DAs on POG should make a distinction between the activities of IBIPs manufacturers/distributors and from the ones of non-life/life manufacturers/distributors.
  • IDD DA on POG should allow insurance distributors to distribute products to customers outside the target market defined by the manufacturer, provided they are able to justify doing so.
  • IDD DA on conflicts of interest should ensure that the list of procedures and measures is fit for insurance products.
  • IDD DA on inducements should not introduce new definitions of “inducement” and “inducement scheme”. Defining the typical remuneration of intermediaries’ professional activities, with the (pejorative) terminology of “inducements” and connecting strict rules to the reception of these, was a far-going interference in their professional activity. There should be no ban on commissions via the backdoor.

  • IDD ITS on IPID

Under IDD Article 20, prior to the conclusion of a contract, the insurance distributor (i.e. the intermediary or the insurer or the ancillary intermediary) is required to provide the customer with the relevant information about an insurance product in a comprehensible form. In relation to the distribution of non-life insurance products, this relevant information must be provided by way of a standardized insurance product information document (IPID) on paper or another durable medium. The manufacturer of the non-life insurance product is required to draw up the IPID. The IPID will not replace the contractual documentation that is provided with an insurance policy

The IPID is intended to be a pre-contractual and stand-alone document that aims to provide relevant information about the product to allow the customer to take an informed decision. The content of the IPID is defined in the IDD and must contain the following information: information about the type of insurance; a summary of the insurance cover, including the main risks insured, the insured sum and, where applicable, the geographical scope and a summary of the excluded risks; the means of payment of premiums and the duration of payments; main exclusions where claims cannot be made ; obligations at the start of the contract ; obligations during the term of the contract; obligations in the event that a claim is made; the term of the contract including the start and end dates of the contract, and the means of terminating the contract.

The format of the IPID, specifying the above-mentioned information, has to be developed by EIOPA through an implementing technical standard (ITS) that the Commission will have to adopt to make it binding for Member States. On 7 February, following consultations with stakeholders in which BIPAR participated, EIOPA published its draft ITS on IPID. EIOPA submitted it to the European Commission, which is expected to adopt it without too many modifications by the summer of 2017 as an Implementing Regulation, directly applicable in all European Union Member States. EIOPA proposed a maximum length for the IPID of two A4 pages, or up to three pages where the need for this can be demonstrated. The proposed design also takes into account how information will be presented via digital media, for instance by allowing the layout of the information to adjust on the small screen of a mobile device.


BIPAR key issues with regard to EIOPA IDD ITS on IPID

  • Difficulties resulting from the implementation of a standardised IPID model that is not necessarily compatible with the specificities of non-life insurance products. The difference of quality between two non-life products is often to be found in detail which probably will be not reflected in an IPID.
  • It is important to ensure that the adaptation of the IPID to digital format does not result in misleading information or missing content.
  • BIPAR believes that restricting the length to a maximum of two sides of A4 may fit with behavioural economists’ view of people's attention span, but seriously constrains what can be put into the document to ensure the aim of giving customers enough information to make an informed decision, is met.
  • The IPID should not be applicable to tailor-made products.
  • Technically, the standardisation of the IPID appears very complicated, the content of the information document and its formalisation cannot be the same for a consumer and for a professional client.

    • Other IDD level 3 measures and reports to be issued by EIOPA

  • Possible EIOPA coordination of NCA monitoring their insurance/reinsurance market
  • EIOPA single electronic register of intermediaries under FOS/FOE
  • EIOPA assisting MSs in case of breach of IDD obligations by intermediaries under FOS/FOE
  • Review of and regulatory standards re PI insurance and financial guarantee
  • EIOPA Website with hyperlinks to national general good rules and EIOPA report on them
  • EIOPA Guidelines for the assessment and the supervision of cross-selling practices
  • EIOPA Guidelines for the assessment of IBIPs that incorporate a structure making it difficult for the customer to understand the risks involved + possible Guidelines for the assessment of non-complex IBIPs
  • EIOPA annual report re all administrative measures or sanctions
  • 4 years after the IDD entry into force, EIOPA report on the application of the IDD.
  • 2 years after the IDD entry into force, EIOPA evaluation of the structure of insurance intermediaries’ markets
  • 4 years after the IDD entry into force, EIOPA report on competent authorities' powers and resources

EIOPA already consulted on both above-mentioned Guidelines regarding “complex IBIPs”. BIPAR responded to 2 consultations in this respect in September 2016 and April 2017. BIPAR stated that IBIPs are more or less difficult products and that in any event, the consumer is always complex and his or her situation is always unique. In most cases, consumers will benefit from receiving at least an appropriateness test.

By 23 February 2021, the Commission has to submit a report assessing whether the scope of the IDD remains appropriate with regard to the level of consumer protection, the proportionality of treatment between different insurance distributors and the administrative burden imposed on competent authorities and insurance distribution channels. By 23 February 2021, the Commission will also have to review the IDD. The review shall include a general survey of the practical application of IDD rules.

Member States have until 23 February 2018 to implement the IDD.

The European Commission organised two workshops so far on the implementation of the IDD with experts from the Member States' competent authorities in October 2016 and in April 2017. The purpose of these meetings was to carry out a state of play of the IDD implementation as well as an analysis of how Member States have started to implement key IDD requirements. Before these two meetings BIPAR sent its positions on IDD key issues to its member associations.

As the IDD is a minimum harmonisation Directive, Members States may introduce additional measures at national level that may lead to unnecessary administrative burden and would have a negative effect on the Single Market. BIPAR will monitor the IDD implementation in the EU Member States and will assist its member associations, for example, in case of wrong implementation of the text. In this context BIPAR issues regular updates on the IDD implementation, article by article.

For more recent news concerning this dossier, please contact your national association.


Important developments:

Bipar answer to EIOPA consultation paper on technical advice on possible delegated acts concerning the insurance distribution directive (Oct 2016)

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