Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2016/97 as regards the date of application of Member States' transposition measures
Date: 2017-12-20
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: approximation of laws, freedom to provide services, insurance company, national implementing measure, provision of services, reinsurance, right of establishment

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   EUROPEAN COMMISSION  Brussels, 20.12.2017 COM(2017) 792 final 2017/0350 (COD)  Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2016/97 as regards the date of application of Member States' transposition measures  (Text with EEA relevance)  
 
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Directive  (EU)  2016/97  ("IDD")  provides  an  updated  harmonised  legal  framework  for  the 
distribution  of  insurance  and  reinsurance  products,  including  insurance-based  investment 
products,  in  the  Internal  Market.  It  aims  at  ensuring  a  greater  transparency  of  insurance 
distributors  with  regard  to  the  price  and  costs  of  their  products,  better  and  more 
comprehensible  product  information  and  improved  conduct  of  business  rules,  in  particular 
with regard to advice. The new rules will be applicable to all distribution channels, including 
direct  sales  by  insurance  companies  to  create  a  level  playing  field  for  all  distributors  and 
guarantee uniform high standards of protection for consumers. 

IDD entered into force on 23 February 2016 and Member States have until 23 February 2018 
to transpose and apply its provisions, as referred to in Article 42 of the Directive. Therefore, 
by 23 February 2018, insurance distributors would be required to comply with the new rules.  

On 21 September 2017, the Commission adopted two Delegated Regulations supplementing 
IDD  with  regard  to  product  oversight  and  governance  requirements  for  insurance 
undertakings  and  insurance  distributors  (POG  Regulation)  and  to  information  requirements 
and  conduct  of  business  rules  applicable  to  the  distribution  of  insurance-based  investment 
products (IBIP Regulation). During the scrutiny period, the European Parliament pointed out 
that the industry might need more time to implement the technical and organisational changes 
required to comply with the Delegated Regulations. In its decisions to raise no objections to 
the Delegated Regulations, it asked the Commission to adopt a legislative proposal setting up 
a date of application at 1 October 2018 but did not request an extension of the transposition 
date  for  Directive  2016/97.1  Sixteen  Member  States  supported  the  European  Parliament's 
proposal and further requested an extension of the transposition period until at least 1 October 
2018. 

According  to  the  European  Parliament  and  a  number  of  Member  States,  the  extended 
application will inter alia allow the insurance sector, which includes small operators such as 
one-person  distribution  businesses  and  small-scale  insurance  to  better  prepare  for  a  correct 
and  effective  implementation  of  IDD  with  the  full  knowledge  of  the  two  Delegated 
Regulations and the applicable national transposition measures, ensuring legal certainty for all 
those concerned.  

Given  the  exceptional  circumstances  and  the  very  particular  time  frame  of  the  dates  of 
transposition  and  application  of  IDD  and  the  application  dates  of  the  two  Delegated 
Regulations,  the  Commission,  therefore,  agrees  to  act  on  the  request  from  the  European 
Parliament and Member States to extend the date from which Member States are to apply the 
laws, regulations and administrative provisions necessary to comply with IDD until 1 October 
2018,  notwithstanding  the  Commission's  view  that  the  industry  has  already  been  given 
considerable time to adapt, in order to give more time to the insurance industry to prepare for 
the application of the new provisions on insurance distribution. 

Moreover, in view of this exceptional urgency in postponing the date of application, pursuant 
to  the  principle  of  sincere  cooperation  (Article  4(3)  TEU),  the  Commission    will  invite 
national Parliaments to respond before the end of the eight-week period laid down in Protocol 

1 

C(2017)06218 – 2017/2854(DEA); C(2017)06229 – 2017/2855(DEA), adopted on 25.10.2017. 

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No 2and if possible to  confirm by 19 January 2018 that they do not intend to send a reasoned 
opinion.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Article 53(1) and Article 62 of the TFEU. 

• 

Subsidiarity (for non-exclusive competence)  

According to the principle of subsidiarity, EU action may only be taken if the envisaged aims 
cannot be achieved by Member States alone. EU intervention is needed to improve the proper 
functioning  of  the  internal  market  and  avoid  the  distortion  of  competition  in  the  field  of 
securities  markets.  In  this  regard,  the  legislation  that  is  being  amended  is  adopted  in  full 
compliance  with  the  principle  of  subsidiarity  and  any  amendment  thereto  must  be  made 
through a Commission proposal. 

•  

Proportionality 

This  EU  action  is  necessary  to  achieve  the  objectives  sought  by  IDD.  The  setting  of  an 
application date as  proposed  is  necessary to  allow for an efficient  and orderly planning  and 
implementation by all involved parties of the provisions at stake. This proposal will therefore 
ensure that the objectives of IDD can be attained. 

3. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

This proposal is not accompanied by a separate Impact Assessment, as an impact assessment 
for IDD has already been undertaken. This proposal does not alter IDD on substance and does 
not  impose  new  obligations  on  insurance  undertaking.  It  only  aims  at  amending  a  date  of 
application for the provisions of IDD to give the opportunity to the insurance sector to better 
apply those provisions. 

4. 

BUDGETARY IMPLICATIONS 

The proposal does not have a budgetary impact for the Commission. 

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2017/0350 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive (EU) 2016/97 as regards the date of application of Member States' 
transposition measures 

 (Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 53(1) and Article 62 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee2,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Directive  (EU)  2016/97  of  the  European  Parliament  and  of  the  Council3  harmonises 
national provisions concerning the distribution of insurance and reinsurance products 
and  insurance-based  investment  products  by  insurance  intermediaries,  insurance 
companies, their employees, and ancillary insurance intermediaries in the Union.  

Pursuant  to  Article  42  of  Directive  (EU)  2016/97,  Member  States  have  to  bring  into 
force the laws, regulations and administrative provisions necessary to comply with that 
Directive by 23 February 2018. 

On  21 September  2017,  the  Commission  adopted  two  Delegated  Regulations 
supplementing  Directive  (EU)  2016/97,  one  with  regard  to  product  oversight  and 
governance  requirements  for  insurance  undertakings  and  insurance  distributors4,  and 
one with regard to information requirements and conduct of business rules applicable 
to the distribution of insurance-based investment products5. 

(4) 

In  its  decisions  to  raise  no  objections  to  the  Delegated  Regulations  referred  to  in 
recital 36,  the  European  Parliament  invited  the  Commission  to  adopt  a  legislative 

2 
3 

4 

5 

6 

OJ C , , p. . 
Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance 
distribution (OJ L 26, 2.2.2016, p. 19). 
[Commission  Delegated    Regulation  (EU)  .../...  of  21  September  2017  supplementing  Directive  (EU) 
2016/97  of  the  European  Parliament  and  of  the  Council  with  regard  to  product  oversight  and 
governance  requirements  for  insurance  undertakings  and  insurance  distributors  (OJ  C  […],  […],  p. 
[…])]. 
[Commission  Delegated  Regulation  (EU)  .../...  of  21  September  2017  supplementing  Directive  (EU) 
2016/97  of  the  European  Parliament  and  of  the  Council  with  regard  to  conduct  of  business  rules 
applicable to the distribution of the insurance-based investment products (OJ C […], […], p. […])]. 
P8  TA-PROV(2017)0404  and  P8  TA-PROV(2017)0405,  adopted  on  25.10.2017,  Available  at 
http://www.europarl.europa. 

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proposal setting 1 October 2018 as the date of application of the laws, regulations and 
administrative  provisions  necessary  to  comply  with  Directive (EU)  2016/97,  rather 
than  23 February  2018.  The  European  Parliament  substantiated  that  request  by  the 
need  to  give  insurance  undertakings  and  insurance  distributors  more  time  to  better 
prepare  for  a  correct  and  effective  implementation  of  Directive (EU)  2016/97  and  to 
implement  the  necessary  technical  and  organisational  changes  to  comply  with  the 
Delegated Regulations.  

(5) 

Given  the  very  short  period  of  time  left  before  the  national  laws,  regulations  and 
administrative provisions necessary to comply with Directive (EU) 2016/97 are to be 
brought into force, this Directive should enter into force without delay. 

(6) 

Directive (EU) 2016/97 should therefore be amended accordingly, 

HAVE ADOPTED THIS DIRECTIVE: 

Directive (EU) 2016/97 is amended as follows: 

Article 1 

(1) 

(2) 

(3) 

in Article 42, paragraph 1 is amended as follows: 

(a) 

the first subparagraph is replaced by the following: 

“By  23 February  2018,  Member  States  shall  adopt  and  publish  the  measures 
necessary  to  comply  with  this  Directive.  They  shall  immediately  inform  the 
Commission thereof.”;  

(4) 

(b) 

the following subparagraph is added:  

"Member  States  shall  apply  the  measures  referred  to  in  the  first  subparagraph 
from 1 October 2018."; 

(5) 

in Article 44, the first paragraph is replaced by the following: 

"Directive 2002/92/EC, as amended by the Directives listed in Annex II, Part A, to 
this Directive is repealed with effect from 1 October 2018, without prejudice to the 
obligations of the Member States relating to the time limits for the transposition into 
national law of the Directives set out in Annex II, Part B to this Directive.". 

This Directive shall enter into force on the day of its publication in the Official Journal of the 
European Union. 

Article 2 

This Directive is addressed to the Member States. 

Done at Brussels, 

Article 3 

For the European Parliament 
The President 

For the Council 
The President 

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