What Should You Do About the Insurance Distribution Directive?
18-Jul-18
What Should You Do About the Insurance Distribution Directive? The European Union has issued a new directive governing the regulation of the insurance industry, to replace the 15-year-old Insurance Mediation Directive (IMD). As with the IMD, the Insurance Distribution Directive (IDD) will mostly be transposed through the Financial Conduct Authority (FCA) rules within the UK. The Financial Services and Markets Act (FSMA) will be amended to incorporate any changes.[i] The FCA have published an imposing 444 page document of the near-final rules. [ii] It is easy to be intimidated by the new regulations, but with a series of timely steps and a little forward planning, it will be possible for insurance companies and brokers to be confident that they are following the rules correctly, with as little disruption as possible. What is the Insurance Distribution Directive? The new directive aims to level the playing field across the insurance industry, EU-wide. It applies to a wider range of insurance selling services. As well as underwriters and brokers it will apply to all companies that sell insurance as an additional service (with some exceptions.) This may include airlines selling travel insurance or price comparison websites. The directive will also demand additional levels of competency and service from insurance sellers and distributors. These include: · Continuous professional development; evidence that all employees have had at least 15 hours of additional training per year. · Clarity on the products being sold; with documentation on the product and clear information about any optional add-ons, including whether they can be purchased separately. · Superior products and product oversight; products are to be reviewed and developed with a clear, specified target market. · ...
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