The objective of the IDD is to harmonise national provisions concerning insurance and reinsurance distribution in the EU. According to the latest European Commission update published in April 2020, all EU Member States have now implemented the IDD. The aim of this article is not to provide you with the most up-to-date information on the subject but to give you a general insight in the subject and its importance for the sector. All rights reserved. With the recent proposal to delay the application date of the IDD to 1 October 2018, one thing remains certain: there is less than a year to get ready and ensure compliance! How, or the extent to which, this may cause a fragmented approach across the EU is yet to be seen. insurance intermediaries, insurance undertakings and ancillary intermediaries (with exemptions). This allows the necessary flexibility to consider local market structures and consumer expectations. The IDD sets a minimum professional indemnity insurance requirement for intermediaries of at least €1.25 million per claim or €1.85m in aggregate, unless such insurance or comparable guarantee is already provided by an insurance or other undertaking on whose behalf the intermediary is … Under EIOPA’s interpretation, an intermediary is not operating under FOS if the intermediary: One of the objectives of the IDD was to clarify intermediaries’ FOS. A 6-month transitional period was given to Member States to adapt their national legislation and to give insurance and reinsurance intermediaries and their insurance providers time to take the necessary implementation measures. IBIPs regime: The IDD contains a specific chapter with additional requirements for IBIPs distributed by insurance undertakings and intermediaries. In accordance with paragraphs 1 and 2 of Article 30 of the IDD, an assessment of the suitability or appropriateness of an insuranceˇbased investment product 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. as well as cross-border activity provisions are included within IDD. The IDD is a minimum harmonisation European Directive that will be applied to intermediaries and also to insurance and reinsurance undertakings who sell direct to their customers. The IDD is a minimum harmonisation directive that will be applied to insurance intermediaries and also to insurance (and reinsurance) undertakings who sell direct to their customers. If a piece of law (usually a directive, but also a regulation on occasion), is described as minimum harmonisation, that means that it sets a threshold which national legislation must meet. IDD will replace and repeal EU Insurance Mediation Directive 2002/92/EC (“IMD”). At this stage, firms should be at an advanced stage of considering their readiness for the IDD. According to IDD Article 41, by 23 February 2020 EIOPA had to prepare a report on the application of the IDD and by 23 February 2021, the Commission has to submit a report on the application of IDD Article 1 and to review the IDD. 18 750 of financial capacity is increased to EUR 19 510. This website uses cookies in order to offer you the most relevant information. has no intention to carry out cross-border business. This allows the UK to maintain its rules for retail investment advisers under the RDR. practices (Article 24.4), EIOPA annual report on all national administrative It applies to insurance distributors, i.e. - To enhance cross-sectoral consistency, certain parts of the IDD are aligned with the rules under the MiFID II Directive. Therefore, besides the directly applicable regulations on Level II, intermediaries must in any case take a close look, in particular, at the national implementing laws … The IDD is an EU wide directive aimed at ensuring minimum harmonisation of insurance regulation across the EU. In May 2019, based on EIOPA proposals submitted in June 2018 after consultation of concerned stakeholders, including BIPAR, and as required by Article 10(7) of the IDD, the European Commission adopted a Delegated Regulation amending IDD amounts for professional indemnity insurance and for financial capacity of insurance and reinsurance intermediaries. the minimum amount of EUR 1 Continuous Professional Development (CPD): 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.). Additional issues which are considered of relevance when it comes to the application of the IDD. PRIIPs, MiFID), the IDD will require all actors involved in the manufacturing and /or distribution of insurance products to review their business strategy, adapt their organisation, as well as rethink their future interactions. The IDD is a new EU wide directive aimed at ensuring minimum harmonisation of insurance distribution regulation across the EU, creating a ‘level playing field’ for insurance intermediaries and insurance distribution, regardless of the channel customers use to purchase their products. Please see www.pwc.com/structure for further details. IDD, as a minimum harmonisation Directive, does not de facto prevent inducements. However, this was not defined in the IDD. Suitability of products in light of costs impact and transparency of remuneration; net margin? The IPID has to be short, stand-alone, comprehensible, accurate and not misleading. The objective of this survey is to gather input on the following areas: Wider scope: The IDD covers the distribution of non-life and life products, reinsurance products, but also insurance-based investment products (IBIPs). 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. Possible IDD, like IMD, is a minimum harmonisation directive, which means that EU/EEA member states are obliged to transpose the directive but they are free to adopt stricter provisions if they wish. This means that insurers have to comply with multiple regulatory requirements in different jurisdictions where individual regulators choose to ‘gold plate’ some of the The IDD introduces a detailed standardised Insurance Product Information Document (IPID) for all non-life insurance products that must be provided to the customer prior to the conclusion of a contract by the insurance distributor. Claims management, loss adjusting and expert claims appraising are not within scope of the draft IDD according to the latest compromise text. POG requirements do not apply to insurance products which consist of insurance of large risks. minimum harmonisation, differences between the IDD rules and the respective national implementing laws are likely to exist. On 20 December 2017, European Commission has issued a legislative proposal to postpone the application date of the IDD, as well as the two Delegated Regulations to 1 October 2018. 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. 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. The IDD is a minimum harmonisation European Directive that will be applied to intermediaries and also to insurance and reinsurance undertakings who sell direct to their customers. According to the IDD, EIOPA was required to prepare a report on the application of the IDD in 2020 and the Commission had to issue a report on the review of the IDD by February 2021. Januar 2016 über Versicherungsvertrieb (Neufassung), information requirements and conduct of business rules applicable to the distribution of insurance-based investment products, product oversight and governance requirements for insurance undertakings and insurance distributors, EIOPA Technical Advice on possible delegated acts - Conflicts of interest, EIOPA Technical Advice on possible delegated acts - Assessment of suitability and appropriateness and reporting to clients, EIOPA Technical Advice on possible delegated acts: Product oversight and governance arrangement (POG), EIOPA Technical Advice on possible delegated acts: Inducement.
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