CELEX: 52012PC0360
Language: en
Date: 2012-07-03
Title: Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on insurance mediation (recast)

|
			
		
		
		52012PC0360
		
			Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on insurance mediation (recast) /* COM/2012/0360 final - 2012/0175 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           Context of the proposal
The Directive
2002/92/EC of the European Parliament and the Council on insurance mediation
(IMD1)[1]
is the only EU legislation which regulates the point of
sale of insurance products so as to ensure the rights of the consumer. It was adopted on 9 December 2002 and had to be transposed by Member States
by 15 January 2005. The Directive is a minimum
harmonisation instrument containing high level principles and has been
implemented in the 27 Member States in substantially different ways. The need
to review IMD1 was already acknowledged during the implementation check carried
out by the Commission in 2005-2008. 
Current and recent financial turbulence has
underlined the importance of ensuring effective consumer protection across all
financial sectors. In November 2010, the G20 asked the OECD, the Financial
Stability Board (FSB) and other relevant international organisations to develop
common principles in the field of financial services in order to strengthen consumer
protection. The draft G20 high level principles on financial consumer
protection underline the need for proper regulation and/or supervision of all
financial service providers and agents that deal directly with consumers. These
principles stipulate that consumers should always benefit from comparable
standards of consumer protection. The current review of IMD1 should be seen in
the light of these guidelines and related international initiatives.
During the discussions in the European
Parliament on the directive which regulates the risk-based approach to
capitalisation and supervision of insurance undertakings (Solvency II)[2], adopted in 2009, a specific
request was furthermore made to review IMD1. Some Members of the Parliament and
some consumer organisations considered that there was a need for improved
policyholder protection in the aftermath of the financial crisis and that
selling practices for different insurance products could be improved. In
particular, strong concerns have been raised with regard to the standards for
the sale of life insurance products with investment elements. In order to ensure cross-sectoral consistency, the European Parliament
requested that the revision of IMD1 would take into account the ongoing
revision of the Markets in Financial Instruments Directive (MiFID II)[3]. This means that, whenever the
regulation of selling practices of life insurance products with investment
elements is concerned, the proposal for a revised Directive (IMD2) should meet the
same consumer protection standards as MiFID II. 
1.1.        Objectives of the proposal
The revised Directive (IMD2) seeks to improve
regulation in the retail insurance market in an efficient manner. It aims at
ensuring a level playing field between all participants involved in the selling
of insurance products and at strengthening policyholder protection.
The overarching objectives of the current
review are undistorted competition, consumer protection and market integration.
In concrete terms, the IMD2 project should achieve the following improvements:
expand the scope of application of IMD1 to all distribution channels (e.g.
direct writers, car rentals, etc.); identify, manage and mitigate conflicts of
interest; raise the level of harmonisation of administrative sanctions and
measures for breach of key provisions of the current Directive; enhance the
suitability and objectiveness of advice; ensure sellers' professional
qualifications match the complexity of products sold; simplify and approximate
the procedure for cross-border entry to insurance markets across the EU.
1.2.        Consistency with other
policies and objectives of the Union
The objectives of the proposal are consistent
with the policies and objectives pursued by the Union. The Treaty provides for
action to ensure the establishment and functioning of the internal market with
a high level of consumer protection as well as the freedom to provide services.

The current proposal is tabled for
adoption as part of a 'Consumer Retail Package' together with the PRIPs
proposal on investment products' disclosures and UCITS V. The PRIPs initiative
aims at ensuring a coherent horizontal approach to product disclosure with
regard to investment products and insurance products with investment elements
(so-called insurance PRIPs[4]),
and provisions on selling practices will be included in the revisions of the
IMD1 and MiFID. 
The proposal is furthermore consistent with,
and complementary to, other EU legislation and policies, particularly in the
areas of consumer protection, investor protection and prudential supervision,
such as Solvency II, MiFID II, and the PRIPs initiative.
IMD2 will regulate selling practices for all
insurance products from general insurance products such as motor insurance,
through to life insurance policies, including those which contain investment
elements, e.g. unit-linked life insurance products. 
IMD2 would continue to have the features of a 'minimum
harmonisation' legal instrument. This means that Member States may decide to go
further if necessary for the purposes of consumer protection. However, the
minimum standards of IMD1 will be raised significantly. Some parts of the new
Directive will be reinforced by Level 2 measures in order to align the rules
with MiFID: in particular, in the chapter regulating the distribution of life
insurance policies with investment elements.
2.           Results of consultation with interested
parties and impact assessment
The Commission Services requested advice from the
European Insurance and Occupational Pensions Authority (EIOPA) (formerly
CEIOPS) on numerous issues relating to the revision of the IMD. EIOPA's final
report was delivered in November 2010.[5]
During 2010-2011, the Commission Services regularly met with representatives of
the insurance sector, consumer organisations and supervisors to discuss the
forthcoming review. A public consultation relating to the IMD1 revision was
carried out by the Commission Services from 26 November 2010 to 28 February
2011. The results of the consultation were also broadly supportive of the
direction of the revision as outlined by the Commission Services.[6] On
10 December 2010, a public hearing was held on IMD2. The discussion focused on
the scope of the Directive, information requirements for insurance
intermediaries, conflicts of interests, cross-border trade, and professional
qualification requirements.[7]
On 11 April 2011 a meeting was organised with experts from Member States
and EIOPA to discuss the results of the public consultation and the possible
structure and contents of IMD2. The large majority of the stakeholders present
at these meetings supported the direction of the revision of IMD1 as outlined
by the Commission Services. 
In line with its 'Better Regulation' policy,
the Commission conducted an impact assessment of policy alternatives. Several specific studies ordered by different Commission Services
were used to prepare the impact assessment. Firstly, DG MARKT contracted
PricewaterhouseCoopers (PWC) to conduct a study to provide a comprehensive
overview of the functioning of insurance distribution in the EU. The report was
finalised in July 2011 and published on the Commission's website[8]. Secondly, this proposal takes
into account the results of a study commissioned in 2010 on the costs and
benefits of potential changes to distribution rules for insurance products and
for insurance investment products.[9]
Thirdly, the findings of a study seeking to assess the quality of advice being
offered across the EU have been considered.[10]
A fourth study seeking insights from behavioural economics on the different
factors relating to investor decision making has also been taken into account.[11]
The policy options discussed in the impact
assessment were assessed against different criteria: market integration for
market players, customer protection and confidence, a level playing field for
various market players, and cost-effectiveness, i.e. the extent to which the
options achieve the sought objectives and facilitate the operation of insurance
markets in a cost-effective and efficient way.
Overall, the estimate of the administrative burden on the basis of the above
mentioned PWC study and industry statistics, reworked by the Commission Services,
is that in view of the large number of undertakings affected (about 1 million),
the proposal will result in a relatively moderate cost of, on average, about 730
euro per undertaking.
The impact
assessment work finished in 2012. The European Commission Impact Assessment Board's recommendations were taken on board especially concerning the
impact on SME's. For instance, SME intermediaries which are currently outside the
scope and which will be brought into scope by the current proposal are
essentially businesses whose principal activity is other than insurance
mediation (so mediation is purely ancillary to their main business such as
travel agents or car rentals). These intermediaries will be subject to a light
touch regime (declaration procedure, Article 4 of the current proposal) as a
proportionate approach to the ancillary nature of the mediation they perform.
In general, proportional requirements have been introduced to take account of
SME's concerns and to respect the principle 'less complex products, less rules'.
For instance, some investment products are wrapped as life insurance policies. A
more stringent regime for the selling practices of those products (life
insurance policies with investment elements (insurance investment products or insurance
PRIPs)) will be introduced (Chapter VII).
3.           Legal elements of the proposal
3.1.        Legal
basis
The proposal is
based on Article 53(1) and 62 of the TFEU. It will replace Directive 2002/92/EC
and deals with the harmonisation of national provisions on insurance
intermediaries and other sellers of insurance products. It brings within its
scope certain ancillary sellers and after-sales businesses such as loss
adjusters and claims handlers. It clarifies the exercise of the freedom of
establishment, of the freedom to provide services, and the powers of
supervisory authorities of home and host Member States in this regard. The main
objective and subject-matter of this proposal is to harmonise national
provisions concerning conduct of business rules for all sellers of insurance
products and other market entities present on insurance and reinsurance markets,
the conditions for their governance, and their supervisory framework.
3.2.        Subsidiarity
and proportionality
According to the principle of subsidiarity
(Article 5(3) of the TEU), action at EU level should be taken only when the
aims envisaged cannot be achieved sufficiently by Member States alone and can
therefore, by reason of the scale or effects of the proposed action, be better
achieved by the EU.
Most of the issues covered by the revision are
already covered by the current IMD1 legal framework. Further, insurance markets
are increasingly cross-border in nature. The conditions under which firms and
operators can compete in this context, whether they be rules on transparency or
customer protection, need to be comparable across borders and are all at the
core of IMD1 today. Action is now required at European level in order to update
and modify the regulatory framework laid out by IMD1 in order to take into
account developments in insurance markets since its implementation. Because of this
integration, isolated national intervention would be far less efficient and
would lead to a fragmentation of markets, resulting in regulatory arbitrage and
distortion of competition. 
EIOPA should play a key role in the implementation
of the new EU-wide framework. Specific competences for EIOPA are necessary in
order to improve the functioning of the insurance markets.
The proposal takes full account of the
principle of proportionality, namely that EU action should be adequate to reach
the objectives and not go beyond what is necessary. It is compatible with this
principle, taking into account the right balance of the public interest at stake
and the cost-efficiency of the measures: in particular, the need to balance
customer protection, efficiency of the markets and costs for the industry have
been central in laying out these requirements.
In view of that principle the proposal
differentiates between the different selling channels for insurance products
and imposes less burdensome registration and professional qualification
requirements on those selling simple insurance products. For example, the
sellers of ancillary insurance products of low risk, such as car rentals and
travel agents are subject to a simplified declaration procedure instead of
registration as insurance intermediaries. The proposal also differentiates between
the life insurance products and the general insurance products in respect of
the remuneration transparency requirements. These proportionality measures are
taken in view of the different levels of complexity and consumer risks related
to the different insurance products and also in view of the intention to reduce
the administrative burden for the SMEs selling insurance products.
3.3.        Compliance
with Articles 290 and 291 TFEU
On 23 September 2009, the Commission adopted
proposals for Regulations establishing EBA, EIOPA, and ESMA. In this respect,
the Commission refers to the Statements in relation to Articles 290 and 291
TFEU it made at the adoption of the Regulations establishing the European
Supervisory Authorities, according to which: 'As regards the process for the
adoption of regulatory standards, the Commission emphasises the unique
character of the financial services sector, following from the Lamfalussy
structure and explicitly recognised in Declaration 39 to the TFEU. However, the
Commission has serious doubts whether the restrictions on its role when
adopting delegated acts and implementing measures are in line with Articles 290
and 291 TFEU.'
3.4.        References
to other directives
Since Directive 2009/138/EC on the taking-up and
pursuit of the business of insurance and reinsurance (Solvency II) is currently
not yet applicable; this proposal refers to the definitions as laid down in
Directive 73/239/EEC, Directive 2002/83/EC and Directive 2005/68/EC. Directives
73/239/EEC, 2002/83/EC and 2005/68/EC will be repealed by Directive
2009/138/EC.
3.5.        Detailed
explanation of the proposal
Chapter I – Scope and Definitions 
Article 1 enlarges the scope of IMD1 to include sales of insurance contracts
by insurance and reinsurance undertakings without the intervention of an
insurance intermediary. It also covers claims management activities by and for
insurance undertakings, loss adjusting and expert appraisal of claims. 
The 'de minimis' exclusion from the scope in
IMD1 remains the same (seller of insurance policies ancillary to sale of goods,
under 500 euro premium on an annualised basis and satisfying other criteria
under the exemption) except that the premium limit on an annualised basis is
increased to €600 pro rata (less than €2 per day). The above mentioned €2 is
the amount of the premium per contract and per day. For instance, opticians
selling complementary insurances on glasses still remain out of scope of the
Directive. 
The insurance policies sold ancillary to the
sale of services fall in the scope of the Directive after the revision. This is
for example the case of travel insurance policies sold by travel agents,
general insurance policies sold by car rental companies and leasing companies.
Article 2
restates the definitions in IMD 1 with some changes and new definitions. 
·      'Insurance mediation' is extended to include the extension of scope
in Article 1 and specifies that certain activities by insurance aggregator
websites constitute insurance mediation. The activity of 'introducing' is
removed. 'Reinsurance mediation' is amended likewise.
·      'Insurance investment products' are defined to follow the definition
of 'investment product' in the Regulation on key information documents for
investment products (Regulation on PRIPs).
·      'Tied insurance intermediary' is extended to include intermediaries
working under the responsibility of another insurance intermediary. 
·      'Advice' is defined as the provision of a personal recommendation to
a customer, on request or otherwise.
·      'Professional customer' is defined for the purposes of exclusion from
the information provisions.
·      'Cross-selling practice' defines a practice where two or more
products are bundled together in a single sale. 
·      'Contingent commission' is defined as a commission where the amount
payable is based on the achievement of agreed targets.
·      'Close links' defines arrangements with connected persons and
arrangements which might affect a supervisor's ability to supervise
effectively.
·      'Remuneration' is defined to include not only payments (fees,
commission, etc.) but also economic benefits of any kind.
·      The definitions of 'home Member State', 'host Member State', 'insurance
intermediary', 'reinsurance intermediary' and 'durable medium' are the subject
of clarifying amendments.
Chapter II - Registration requirements
Article 3 leaves
the registration requirements of IMD1 largely unchanged, but requires the
establishment of a single electronic register by EIOPA (linking of national
databases) and requires disclosure of certain arrangements with other persons. This
single electronic register shall function as a portal linking back to national
registers. It also exempts from registration persons within the scope of the
declaration procedure (see Article 4).
Chapter III - Declaration procedure 
Article 4 establishes
a simplified procedure which exempts two groups of persons from the
registration procedure mentioned above, enabling them to carry on mediation
activities by way of a simple declaration. They are 
·      those who conduct insurance mediation as an activity ancillary to
their principal professional activity, and who meet certain other conditions
(such as travel agents). Broadly, the other conditions are that the products
are complementary to another product or service, do not cover life assurance or
liability risks other than incidental cover, and 
·      those whose activities are limited to the professional management of
claims and to loss adjustment.
The declaration procedure mainly covers travel
agents, car rentals selling insurance products as well as loss adjusters and
claim handlers.
Chapter IV - Freedom to provide services and
freedom of establishment
Articles 5, 6, and 7 reflect the provisions in Article 5 of IMD1, the revised MiFID
proposal and the Luxembourg Protocol[12].
They also address the division of competence between Home and Host Member State
supervisors, particularly in situations where an insurance or reinsurance
intermediary is not meeting its obligations when transacting business in the
Host Member State. 
Chapter V – Other organisational measures
Article 8 sets
out the professional and organisational requirements that comprise Article 4 in
IMD1: requirement to have appropriate knowledge and ability; requirement to be
of good repute; requirement to hold professional indemnity insurance and
measures to protect against the intermediary's inability to transfer premium to
the insurance undertaking or claims money or return premiums to the insured. It
also includes a requirement for continuous professional development. In order
to achieve a proportionate impact, the rules applying to those pursuing
intermediation activities on an ancillary basis, or whose activities are
limited to the professional management of claims, will be proportionate to the
complexity of the product sold. Accordingly, Article 8 is not applied in full to
such intermediaries.
The Commission is empowered to adopt delegated
acts to specify the notion of adequate knowledge and ability.
Article 9
concerns the publication of general good rules. This article has changed from
Article 6 in IMD1 and now requires Member States to publish the general good
rules and requires EIOPA to collect and publish information about such rules (for
an indicative exposition of the principles of general good in relation to the Third
Insurance Directives, see the Commission's Interpretative Communication on freedom
to provide services and the general good in the insurance sector 2000/C 43/03).
Articles 10 to 12 restate the former Articles 7, 9 and 10, on competent authorities, exchange
of information between Member States and complaints.
Article 13 concerns
procedures for the out-of-court settlement of disputes involving customers, and
strengthens the former Article 11 of IMD1, by requiring (rather than
encouraging) Member States to set up procedures and ensure participation in
them. 
Article 14
concerns the restriction on the use of intermediaries. It extends the former Article
3(6) of IMD1 to reinsurance undertakings and insurance and reinsurance
intermediaries, and takes into account the declaration procedure (see Article
4).
Chapter VI – Information requirements and
conduct of business rules
Articles 15 to 20 restate the disclosure requirements,
the large risks exemption, the stricter provisions in ex-Article 12, and the information
conditions of ex-Article 13. They also set out the following additional
provisions: 
·      general principle for intermediaries that they should act in the
best interest of their customers;
·      similar information requirements for insurance undertakings;
·      a requirement to disclose the basis and amount of the remuneration
by insurance intermediaries; 
·      a requirement to disclose the amount of any variable remuneration
received by the sales employees of insurance undertakings and intermediaries; 
·      a mandatory 'full disclosure' regime for the sale of life insurance products
and an 'on–request' regime (i.e. on customer's demand) for the sale of non-life
products with a transitional period of 5 years. After the expiry of the 5 years
transitional period, the full disclosure regime will automatically apply for
the sale of non-life products as well. During the transitional period, the
proposal differentiates between the life and non-life products. In case of the sale
of life products, the remuneration (commission) tends to be higher. Also, life
products are also closer to investment products and buying such a product
constitutes a long-term investment. For non-life products, the situation is
different. The remuneration is usually lower (commission is about 5%-10% of the
premium) and the product involves less risks. In most of the EU countries,
consumer can switch to another, substitutable product very easily and on an
affordable manner.
·      an obligation on insurance undertakings and intermediaries to give
the customer, prior to the conclusion of a contract, sufficient information about
the insurance product to allow him to make an informed decision; 
·      a requirement that EIOPA ensures that information it receives
relating to stricter national provisions is communicated to insurance
undertakings, intermediaries and consumers; and 
·      further exceptions to the general requirement for information to be
given through a durable medium.
In terms of achieving higher consumer
protection, these provisions offer higher transparency compared to the original
Directive (2002/92/EC) regarding the nature, the structure and the amount of
the intermediary's remuneration and provide clarity with regard to the
principal-agent relationship, including how this may impact on advice. Consumer
protection has moved forward significantly over the last years, and consumers are
today increasingly information-seeking and cost-conscious. Disclosure of the
different elements of the total price - including the intermediary's remuneration
- will enable the customer to choose on the basis of insurance cover, linked
services (for example if the intermediary does claims-handling) and price. This
will further ensure suitable, cost-efficient products and intermediary services
for consumers. Mandatory disclosure of remuneration should have positive
effects on competition in insurance distribution as it would ensure that
consumers receive wider information on products and costs, as well as possible conflicts
of interest. It will be easier for consumers to compare insurance covers and
prices between products sold through different distribution channels. Several
EU Member States do already require remuneration disclosure for some insurance
products, and MiFID II will require this for investment products. This new
information will give consumers more complete information about what services
the intermediary performs and what are the related costs. The remuneration
disclosure must however be implemented in a way that the comparison between intermediaries
and direct writers is ensured. Information about the price of cover as well as
the distribution costs will provide comparability. In particular - for avoiding
situations of conflict of interest insurance undertakings should also disclose
the basis for the calculation of their employees' variable remuneration
resulting from the sale of a product. These provisions furthermore address
certain key problems related to cross-border provision of insurance
intermediary services: lack of legal certainty and lack of comparability. If
the harmonised legal framework is improved, intermediaries as well as their
customers may more readily take the step of selling or buying insurance
products cross-border. Improved disclosure will facilitate comparison between
products and distribution channels (as mentioned above), which is today
particularly difficult in cross-border trade situations. 
Article 21 introduces
a provision on bundling products together and requires that the customer be
informed that the products may be purchased separately and be given certain
information in this regard. It also requires EIOPA to develop, and thereafter
update, guidelines for the supervision of such practices.
Chapter VII – Additional customer protection
requirements in relation to insurance investment products 
Article 22
covers the scope of these additional provisions, applying them to an insurance
intermediary or undertaking when they sell insurance investment products.
Article 23
contains additional conflicts of interest provisions, requiring such conflicts
to be identified. It gives the Commission power by delegated act to 
·      define steps that may be required to identify, prevent, manage and
disclose such conflicts; and
·      to establish criteria for specifying types of conflicts which may
damage the interests of customers.
Article 24 is
based on Article [23] of MiFID II. It sets out the MiFID II requirement to 
·      act honestly fairly and professionally in accordance with the best
interests of customers;
·      ensure that information is fair clear and not misleading;
·      provide information about the insurance undertaking or intermediary
and its services (in particular whether any advice is provided on an
independent basis), about the scope of any market analysis (whether on-going
suitability assessment will be provided), about proposed products and
investment strategies, and about costs.
It also specifies the basis on which advice may
be said to be independent, which includes a requirement as to the assessment of
products on the market and a requirement not to accept remuneration from third
parties.
The Commission is empowered to adopt delegated acts
to ensure compliance with this article.
Article 25 sets
out how suitability and appropriateness is to be assessed, and requires information
to be obtained from the customer. For non-advised sales, the intermediary or
undertaking must obtain information about a customer's knowledge and experience
to determine the appropriateness of the product for him. For advised sales, it
must obtain the customer's financial situation and investment objectives to
determine suitability. Where a product is not appropriate or suitable, as the
case may be, it must warn the customer of this. The seller must also keep
records of the terms on which it will provide services to the customer, and
provide reports to the customer. The Commission is empowered to adopt delegated
acts to ensure compliance.
Chapter VIII – Sanctions
Article 26
requires Member States to ensure that effective, proportionate and dissuasive
administrative sanctions and measures are taken by competent authorities for
breach of the national provisions adopted pursuant to the Directive. 
Administrative sanctions and measures must apply
to those natural or legal persons which, under national law, are responsible
for a breach.
Competent authorities must be given all
necessary investigatory powers, and must co-operate on cross-border cases.
Article 27
requires publication of the sanctions or measures imposed for breaches.
Article 28
specifies certain breaches and sets out the administrative sanctions which
apply to the intermediaries including withdrawal of registration, bans against
persons responsible for the exercise of management functions, and pecuniary
sanctions of up to twice as much as the benefit derived from the breach if that
benefit can be determined.
Criminal sanctions are not covered by this
proposal.
Article 29 sets
out the factors to take into account in imposing sanctions and measures, including
benefits derived from the breach; losses caused to third parties, and the level
of cooperation of the responsible person, and requires EIOPA to issue guidelines
in respect of the sanctions. It also requires communication of any sanction or
measures to the intermediary or undertaking, together with justification of
that sanction.
Article 30
requires effective mechanisms to encourage reporting of breaches and an appropriate
protection for whistle-blowers and their personal data, as well as the
protection of data of natural persons allegedly responsible for breaches.
Article 31
requires annual reporting of aggregate information regarding breaches to EIOPA as
well as publication of that information by EIOPA. The Commission is empowered
to adopt implementing technical standards in this respect, which EIOPA is to
develop and submit to the Commission [6] months after the publication of the
Directive. 
Chapter IX – Final provisions
Articles 32 to 39 restate (updated where relevant) the final provisions in IMD1
concerning the right to apply to the courts, transposition and entry into
force, repeal of prior legislation and addressees. In addition, Articles 33
and 34 set out conditions applying to the Commission's power to adopt
delegated acts as specified in the Directive, and Article 35 provides a
process for review and evaluation by the Commission of the Directive after its
entry into force. This review shall in particular consider the impact of the
disclosure rules in Article 17(2) on non-life insurance intermediaries that are
small and medium-sized undertakings.
4.           BUDGETARY IMPLICATION
Specific budget implications for the Commission
are also assessed in the financial statement accompanying this proposal. The
specific budget implications of the proposal relate to tasks allocated to EIOPA
as specified in the legislative financial statement accompanying this proposal.
The proposal has implications for the Community
budget.
ê 2002/92/EC
(adapted)
2012/0175 (COD)
Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
on insurance mediation 
(recast)
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community
Ö on the
Functioning of the European Union Õ, and in
particular Articles 47(2) Ö 53(1) Õ and Article 55 Ö 62 Õ thereof, 
Having regard to the proposal from the European Commission,
ò new
After
transmission of the draft legislative act to the national Parliaments,
ê 2002/92/EC
Having regard to the opinion of the European Economic and Social Committee,
ò new
After consulting
the European Data Protection Supervisor,
ê 2002/92/EC
ð new
Acting in accordance with the ð ordinary legislative ï procedure laid down in Article 251 of the
Treaty,
Whereas:
ò new
(1)       A number of
amendments are to be made to Directive
2002/92/EC of the European Parliament and the Council of 9 December 2002 on
insurance mediation[13]. In the interests
of clarity, that Directive should be recast.
(2)       Since the main objective and
subject-matter of this proposal is to harmonise national provisions concerning
the mentioned areas, the proposal should be based on Article 53(1) and 62 TFEU.
The form of a Directive is appropriate in order to enable the implementing
provisions in the areas covered by this Directive, when necessary, to be
adjusted to any existing specificities of the particular market and legal
system in each Member State. This Directive should also aim at
coordinating national rules concerning the access to the activity of insurance
and reinsurance mediation including professional management of claims and loss
adjusting, and is therefore based on Article 53(1) of the Treaty. In addition,
since this is a sector offering services across the Union, this Directive is
also based on Article 62 of the Treaty.
ê 2002/92/EC
recital 1 (adapted)
(3)       Insurance and reinsurance
intermediaries play a central role in the distribution of insurance and
reinsurance products in the Community Ö Union Õ.
ê 2002/92/EC
recital 2
A first step to
facilitate the exercise of freedom of establishment and freedom to provide
services for insurance agents and brokers was made by Council Directive
77/92/EEC of 13 December 1976 on measures to facilitate the effective
exercise of freedom of establishment and freedom to provide services in respect
of the activities of insurance agents and brokers (ex ISIC Group 630) and, in
particular, transitional measures in respect of those activities[14].
ê 2002/92/EC
recital 3
Directive
77/92/EEC was to remain applicable until the entry into force of provisions
coordinating national rules concerning the taking-up and pursuit of the
activities of insurance agents and brokers.
ê 2002/92/EC
recital 4
Commission
Recommendation 92/48/EEC of 16 December 1991 on insurance intermediaries[15] was largely followed by Member States and helped
to bring closer together national provisions on the professional requirements and
registration of insurance intermediaries.
ê 2002/92/EC
recital 9
ð new
(4)       Various types of persons
or institutions, such as agents, brokers and 'bancassurance' operators, ð insurance undertakings, travel agents
and car rental companies ï can distribute insurance products. Equality of treatment between
operators and customer protection requires that all these persons or
institutions be covered by this Directive.
ò new
(5)       The
application of Directive 2002/92/EC has shown that a number of provisions
require further precision with a view to facilitating the exercise of insurance
and reinsurance mediation and that the protection of consumers requires an
extension of the scope of that Directive to all sales of insurance products,
whether by insurance intermediaries or insurance undertakings. In respect of their sales, after-sales and
claims processes insurance undertakings which sell directly insurance products,
should be brought into the scope of the new Directive on a similar basis as insurance
agents and brokers. 
(6)       In
order to guarantee that the same level of protection applies regardless of the
channel through which consumers buy an insurance product, either directly from
an insurance undertaking or indirectly from an intermediary, the scope of the
Directive needs to cover not only insurance undertakings but other market
participants who sell insurance products on an ancillary basis (e.g. travel
agents and car rental companies, suppliers of goods not meeting conditions for
the exemption). 
(7)       This
Directive should apply to persons whose activity consists of assisting (whether
on behalf of a customer or an insurance undertaking) in the administration and
performance of a contract of insurance or reinsurance, including the
professional management of claims, or of loss adjusting or the expert appraisal
of claims. 
ê 2002/92/EC
recital 5
(8)       However, Tthere are still substantial differences
between national provisions which create barriers to the taking-up and pursuit
of the activities of insurance and reinsurance intermediaries in the internal
market. It is therefore appropriate to replace Directive
77/92/EEC with a new directive.
ò new
(9)       Current and recent financial turbulence
has underlined the importance of ensuring effective consumer protection across
all financial sectors. It is appropriate therefore to strengthen the confidence
of customers and to make regulatory treatment of the distribution of insurance
products more uniform in order to ensure an adequate level of customer
protection across the Union. Measures
to protect customers should be adapted to the particularities of each category
of customers (professional or other).
ê 2002/92/EC
recital 11 (adapted)
ð new
(10)     This Directive should apply
to persons whose activity consists in Ö of Õ providing
insurance ð or reinsurance ï mediation services to third parties for remuneration, which may be
pecuniary or take some other form of agreed economic benefit tied to
performance.
ò new
(11)     This
Directive should apply to persons whose activity consists of the provision of
information on one or more contracts of insurance or reinsurance in response to
criteria selected by the customer whether via a website or other means, or the
provision of a ranking of insurance or reinsurance products or a discount on
the price of a contract, when the customer is able to directly conclude an
insurance contract at the end of the process; it should not apply to mere
introducing activities consisting of the provision of data and information on
potential policyholders to insurance or reinsurance intermediaries or
undertakings or of information about insurance or reinsurance products or an
insurance or reinsurance intermediary or undertaking to potential
policyholders.
ê 2002/92/EC
recital 12
(12)     This Directive should not
apply to persons with another professional activity, such as tax experts or
accountants, who provide advice on insurance cover on an incidental basis in
the course of that other professional activity, neither should it apply to the
mere provision of information of a general nature on insurance products,
provided that the purpose of that activity is not to help the customer conclude
or fulfil an insurance or reinsurance contract, nor the
professional management of claims for an insurance or reinsurance undertaking,
nor the loss adjusting and expert appraisal of claims.

ê 2002/92/EC
recital 13
ð new
(13)     This Directive should not
apply to persons practising insurance mediation as an ancillary activity under
certain strict conditions ð restrictions regarding the policy,
in particular the knowledge required to sell it, the risks covered and the
amount of premium ï.
ê 2002/92/EC
recital 10 (adapted)
(14)     This Directive contains a definition of
Ö defines Õ 'tied
insurance intermediary' which takes into Ö to take Õ account of the
characteristics of certain Member States' markets and whose purpose is to
establish the conditions for registration applicable
to such intermediaries. This definition is not intended
to preclude Member States from having similar concepts in respect of insurance
intermediaries who, while acting for and on behalf of an insurance undertaking
and under the full responsibility of that undertaking, are entitled to collect premiums or amounts intended for the
customer in accordance with the financial guarantees laid down by this
Directive.
ê 2002/92/EC
recital 14
ð new
(15)     Insurance and reinsurance
intermediaries ð who are natural persons ï should be registered with the competent authority of the Member
State where they have their residence or their head
office, provided that they meet strict professional requirements in relation to
their competence, good repute, professional indemnity cover and financial
capacity; ð those which are legal persons should
be registered with the competent authority of the Member State where they have
their registered office (or, if under their national law they have no registered
office, their head office), provided that they meet strict professional
requirements in relation to their ability, good repute, professional indemnity
cover and financial capacity. Insurance intermediaries already registered in
Member States shall not be required to register again under this
Directive. ï
ê 2002/92/EC
recital 6 and recital 15 (adapted)
ð new
(16)     Insurance and reinsurance
intermediaries should be able to avail themselves of the freedom of
establishment and the freedom to provide services which are enshrined in the
Treaty. Such
Ö Accordingly, Õ registration ð with or a declaration to their home
Member State ï should allow insurance and reinsurance intermediaries to operate in
other Member States in accordance with the principles of freedom of
establishment and freedom to provide services, provided that an appropriate
notification procedure has been followed between the competent authorities.
ê 2002/92/EC
recital 16 (new)
(17)     Appropriate
sanctions are needed against persons exercising the activity of insurance or
reinsurance mediation without being registered, against insurance or
reinsurance undertakings using the services of unregistered intermediaries
and against intermediaries not complying with national provisions adopted
pursuant to this Directive.
ò new
(18)     In
order to enhance transparency and facilitate cross-border trade, EIOPA should
establish, publish and keep up to date a single electronic database containing
a record of each insurance and reinsurance intermediary which has notified an
intention to exercise its freedom of establishment or to provide services. Member
States should provide relevant information to EIOPA promptly to enable it to do
this. This database should show a hyperlink to each relevant competent
authority in each Member State. Each competent authority of each Member State
should show on its website a hyperlink to this database. 
(19)     The
relative rights and responsibilities of home and host Member States in respect
of the supervision of insurance and reinsurance intermediaries registered by
them or carrying on insurance or reinsurance mediation activities within their
territory in exercise of the rights of freedom of establishment or freedom to
provide services, should be clearly established.
(20)     Member
States should not apply the registration requirements to insurance intermediaries
which conduct insurance mediation in relation to certain types of insurance
contract on an ancillary basis or to professional management of claims, loss
adjusting or expert appraisal of claims, provided that they comply with the
requirements of this Directive as to knowledge and ability and good repute and
the applicable information and conduct of business requirements, and a
declaration of activity has been submitted to the competent authority.
ê 2002/92/EC
recital 7 (adapted)
(21)     The inability of insurance
intermediaries to operate freely throughout the Community Ö Union Õ hinders the
proper functioning of the single market in insurance.
ò new
(22)     It
is important to guarantee a high level of professionalism and competence among
insurance and reinsurance intermediaries and the employees of direct insurers
who are involved in activities preparatory to, during and after the sales of insurance
policies. Therefore, the professional knowledge of an intermediary, of the
employees of direct insurers, and of car rental companies and travel agents, as
well as the professional knowledge of persons carrying on the activities of the
management of claims, loss adjusting or expert appraisal of claims needs to
match the level of complexity of these activities. Continuing education should
be ensured. 
ê 2002/92/EC
recital 8
ð new
(23)     The coordination of
national provisions on professional requirements and registration of persons
taking up and pursuing the activity of insurance ð or reinsurance ï mediation can therefore
contribute both to the completion of the single market for financial services
and to the enhancement of customer protection in this field.
ò new
(24)     In
order to enhance cross border trade, principles regulating mutual recognition
of intermediaries' knowledge and abilities should be introduced.
(25)     A
national qualification accredited to level 3 or above under the European
Qualification Framework established under the Recommendation of the European
Parliament and Council of 23 April 2008 on the establishment of the European
Qualifications Framework for lifelong learning[16]
should be accepted by a host member state as demonstrating that an insurance or
reinsurance intermediary meets the requirements of knowledge and ability which
are a condition of registration in accordance with this Directive. This framework helps Member States,
education institutions, employers and individuals compare qualifications across
the Union's diverse education and training systems. This tool is essential for
developing a employment market throughout the Union. This framework is not
designed to replace national qualifications systems but to supplement the
actions of the Member States by facilitating cooperation between them.
(26)     Despite
the existing single passport systems for insurers and intermediaries, the
European insurance market remains very fragmented. In order to facilitate
cross-border business and enhance transparency for consumers, Member States
shall ensure publication of the general good rules applicable in their
territories, and a single electronic register and information on all Member
States' general good rules applicable to insurance and reinsurance mediation should
be made publicly available.
ê 2002/92/EC
recital 17
(27)     Cooperation and exchange of
information between the competent
authorities are essential in order to protect customers and ensure the
soundness of insurance and reinsurance business in the single market.
ê 2002/92/EC
recital 22 (adapted)
ð new
(28)     There is a need for suitable
Ö appropriateÕ and effective ð out-of-court ï complaint and redress procedures in the Member States in order to
settle disputes between insurance intermediaries ð or undertakings ï and customers, using, where appropriate, existing procedures. ð Effective out-of-court complaint and redress
procedures should be available to deal with disputes concerning rights and
obligations established under this Directive between insurance undertakings or
persons selling or offering insurance products and customers. In order to
enhance the effectiveness of out-of-court resolution of disputes procedures
dealing with complaints submitted by customers, this Directive should provide
that insurance undertakings or persons selling or offering insurance products have
to participate in dispute resolution procedures, which do not result in a
binding decision, instituted against themselves by customers and concerning
rights and obligations established under this Directive. Such out-of-court
resolution of disputes procedures would aim to achieve a quicker and less
expensive settlement of disputes between insurance undertakings or persons
selling or offering insurance products and customers and lightening of the
burden on the court system. However, out-of-court resolution of disputes
procedures should not prejudice the rights of the parties to such procedures to
bring legal proceedings before courts. ï 
ê 2002/92/EC
recital 23
ð new
Without prejudice to the right of customers to
bring their action before the courts, Member States should ð ensure that ADR entities
dealing with disputes referred to under this Directive ï encourage public or private
bodies established with a view to settling disputes out-of-court, to
cooperate in resolving cross-border disputes. ð Member States should encourage ADR
entities dealing with such disputes to become part of FIN-NET[17]. ï Such cooperation could for example be aimed at
enabling customers to contact extra-judicial bodies established in their Member
State of residence about complaints concerning insurance intermediaries
established in other Member States. The setting up of the FIN-NET network
provides increased assistance to consumers when they use cross-border services.
The provisions on procedures should take into account Commission Recommendation 98/257/EC of 30 March 1798 on the principles applicable to the bodies
responsible for out-of-court settlement of consumer disputes[18].
ò new
(29)     The
expanding range of activities that many insurance intermediaries and
undertakings carry on simultaneously has increased potential for conflicts of
interest between those different activities and the interests of their
customer. It is therefore necessary that Member States to provide for rules to
ensure that such conflicts do not adversely affect the interests of the customer.
(30)     Consumers
should be provided in advance with clear information about the status of the
persons who sell the insurance product and about the remuneration which they
receive. There is a need to introduce a mandatory status disclosure for
European insurance intermediaries and insurance undertakings. This information should
be given to the consumer at the pre-contractual stage. Its role is to show the
relationship between the insurance undertaking and the intermediary (where
applicable) as well as the structure and the content of the intermediaries'
remuneration.
(31)     In
order to mitigate conflicts of interest between the seller and the buyer of an
insurance product, it is necessary to ensure sufficient disclosure of remuneration
of insurance distributors. Accordingly, for life insurance products, the
intermediary and the employee of the insurance intermediary or the insurance
undertaking should be obliged to inform the customer about its remuneration, in
advance of the sale. For other insurance products, subject to a transitional
period of 5 years, the customer must be informed of the customer's right to
request this information, which must be provided to the customer upon request.
(32)     In
order to provide a customer with comparable information on the insurance mediation
services provided regardless of whether the customer purchases through an
intermediary, or directly from an insurance undertaking, and to avoid the
distortion of competition by encouraging insurance undertakings to sell direct
to customers rather than via intermediaries in order to avoid information
requirements, insurance undertakings should also be required to provide
information about remuneration to customers with whom they deal directly in the
provision of insurance mediation services about the remuneration they receive
for the sale of insurance products.
(33)     As
the current proposal aims to enhance consumer protection, some of its
provisions are only applicable in "business to consumer" (B2C) relationships,
especially those which regulate conduct of business rules of insurance
intermediaries or of other sellers of insurance products.
(34)     In
order to avoid mis-selling cases, if necessary, the sale of insurance products
should be accompanied with honest and professional advice.
ê 2002/92/EC
recital 18 (adapted)
(35)     It is essential for the
customer to know whether he/she is
dealing with an intermediary who is advising him Ö the
customer Õ on products
from a broad range of insurance undertakings or on products provided by a
specific number of insurance undertakings. 
ê 2002/92/EC
recital 20 (adapted)
ð new
(36)     ð Due to the increasing dependence of
consumers on personal recommendations, it is appropriate to include a
definition of advice. Before advice is provided, the insurance intermediary or
undertaking should assess the customer's needs, demands and its financial
situation. ï If the intermediary declares that he Ö it Õ is giving
advice on products from a broad range of insurance undertakings, he Ö it Õ should carry
out a fair and sufficiently wide-ranging analysis of the products available on
the market. In addition, all ð insurance ï intermediaries ð and insurance undertakings ï should explain the reasons underpinning their advice. 
ò new
(37)     Prior
to the conclusion of a contract, including in the case of non-advised sales,
the customer should be given the relevant information about the insurance
product to allow the customer to make an informed decision. The insurance
intermediary should be able to explain to the customer the key features of the
insurance products it sells.
(38)     Uniform rules should be laid down in order
to give the person selling the insurance product a certain choice with regard
to the medium in which all information is provided to the customer allowing for
use of electronic communications where it is appropriate having regard to the
circumstances of the transaction. However, the customer should be given the
option to receive it on paper. In the interest of consumer access to
information, all pre-contractual information should always be provided free of
charge.
ê 2002/92/EC
recital 21
ð new
(39)     There is less of a need to
require that such information be disclosed when the customer is a company seeking
reinsurance or insurance cover for commercial and industrial risks ð , or is a professional customer (see
Annex I of the Directive) ï .
ê 2002/92/EC
recital 19 (adapted)
ð new
(40)     This Directive should specify
the ð minimum ï obligations which ð insurance undertakings and ï insurance intermediaries should have in providing information to
customers. A Member State may Ö should be
able to Õ in this area
maintain or adopt more stringent provisions which may be imposed on insurance
intermediaries ð and insurance undertakings ï independently of their place of
residence ð the provisions of their home Member
State ï where they are pursuing ð insurance ï mediation activities on its territory provided that any such more
stringent provisions comply with Community Ö Union Õ law, including
Directive 2000/31/EC of the European Parliament and of the Council of 8 June
2000 on certain legal aspects of information society services, in particular
electronic commerce, in the Internal Market (Directive on electronic commerce)[19]. ð A Member State which proposes to apply
and applies provisions regulating insurance intermediaries and the sale of
insurance products in addition to those set out in this Directive should ensure
that the administrative burden stemming from these provisions is proportionate
for consumer protection. In the interest of consumer protection and in order to
prevent mis-selling of insurance products, Member States should be permitted to
apply exceptionally the more stringent requirements to such insurance intermediaries
conducting insurance mediation on an ancillary basis if they consider it
necessary and proportionate.ï 
ò new
(41)     Cross-selling
practices are a common strategy for retail financial service providers
throughout the Union. They can provide benefits to consumers but can also
represent practices where the interest of consumers is not adequately
considered. For instance, certain forms of cross-selling practices or products,
namely tying practices where two or more financial services are sold together
in a package and at least one of those services or products is not available
separately, can distort competition and negatively affect consumers' mobility
and their ability to make informed choices. An example of tying practices can
be the necessary opening of current accounts when an insurance service is
provided to a consumer in order to pay the premiums or the necessary conclusion
of a motor insurance contract when a consumer credit is provided to a consumer
in order to insure the financed car. While practices of bundling, where two or
more financial services or products are sold together in a package, but each of
the services can also be purchased separately, may also distort competition and
negatively affect customer mobility and customers' ability to make informed
choices, they at least leave choice to the customer and may therefore present
less risk to the compliance of insurance intermediaries with their obligations
under this directive. The use of such practices should be carefully assessed in
order to promote competition and consumer choice.
(42)     Contracts
of insurance that involve investments are often made available to customers as
potential alternatives or substitutes to investment products subject to
Directive [MiFID II][20].
To deliver consistent investor protection and avoid the risk of regulatory
arbitrage, it is important that retail investment products (insurance
investment products as defined in the Regulation on key information documents
for investment products) are subject to the same conduct of business standards:
these include provision of appropriate information, requirements for advice to
be suitable and restrictions on inducements, as well as requirements to manage
conflicts of interest, and in the case of independent advisers, restrictions on
the form of remuneration. The European Securities and Markets Authority (ESMA) and
the European Insurance and Occupational Pensions Authority (EIOPA) should work
together to achieve as much consistency as possible in the conduct of business
standards for retail investment products that are subject to either [MiFID II]
or to this Directive through guidelines. For insurance investment products, the
standards of this Directive which are applicable to all insurance contracts (Chapter
VII of this Directive), and the enhanced standards for insurance investment products
are cumulative. Accordingly, persons carrying out insurance mediation in
relation to insurance investment products should comply with the conduct
standards applicable to all insurance contracts as well as to the enhanced
standards applicable to insurance investment products.
(43)     In
order to ensure compliance with the provisions of this Directive by insurance
undertakings and persons who pursue insurance mediation, and to ensure that
they are subject to similar treatment across the Union, Member States should be
required to provide for administrative sanctions and measures which are
effective, proportionate and dissuasive. A review of existing powers and their
practical application has been carried out with the aim of promoting
convergence of sanctions and measures in the Commission Communication of 8
December 2010 on reinforcing sanctioning regimes in the financial sector[21]. Therefore, administrative
sanctions and measures laid down by Member States should satisfy certain
essential requirements in relation to addressees, criteria to be taken into
account when applying a sanction or measure, publication, key sanctioning
powers and levels of administrative pecuniary sanctions.
(44)     In
particular, the competent authorities should be empowered to impose pecuniary
sanctions which are sufficiently high to offset the benefits that can be
expected and to be dissuasive even for larger institutions and their managers.
(45)     In
order to ensure a consistent application of sanctions across Member States,
when determining the type of administrative sanctions or measures and the level
of administrative pecuniary sanctions, Member States should be required to
ensure that the competent authorities take into account all relevant
circumstances.
(46)     In
order to strengthen the dissuasive effect on the public at large and to inform
about breaches of rules which may be detrimental to customer protection, sanctions
and measures imposed should be published, except in certain well-defined
circumstances. In order to ensure compliance with the principle of
proportionality, sanctions and measures imposed should be published on an
anonymous basis where publication would cause a disproportionate damage to the
parties involved. 
(47)     In
order to detect potential breaches, the competent authorities should have the
necessary investigatory powers, and should establish effective mechanisms to
encourage reporting of potential or actual breaches. 
(48)     This
Directive should refer to both administrative sanctions and measures irrespective
of their qualification as a sanction or a measure under national law.
(49)     This
Directive should be without prejudice to any provisions in the laws of Member
States in respect of criminal offences.
(50)     In
order to attain the objectives set out in this Directive, the power to adopt
acts in accordance with Article 290 of the Treaty should be delegated to the
Commission in respect of details concerning notions of adequate knowledge and
competence of the intermediary, management of conflicts of interest, conduct of
business obligations in relation to insurance packaged retail investment
products and procedures and forms for submitting information in relation to
sanctions. It is of particular importance that the Commission carries out
appropriate consultations during its preparatory work, including at expert
level. The Commission, when preparing and drawing up delegated acts, should
ensure a simultaneous, timely and appropriate transmission of relevant
documents to the European Parliament and to the Council.
(51)     Technical
standards in financial services should ensure consistent harmonisation and
adequate protection of consumers across the Union. As a body with highly
specialised expertise, it would be efficient and appropriate to entrust EIOPA
with the elaboration of draft regulatory and implementing technical standards
which do not involve policy choices, for submission to the Commission. 
(52)     By
means of delegated acts pursuant to Articles 290 and 291 of the Treaty on the
Functioning of the European Union and in accordance with Articles 10 to 15 of
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of
24 November 2010 establishing a European Supervisory Authority (European
Insurance and Occupational Pensions Authority)[22],
the Commission should adopt delegated acts as set out in Articles [8] regarding
notions of adequate knowledge and ability of the intermediary, Article [17
and23] regarding management of conflicts of interest and Articles [24 and 25]
regarding conduct of business obligations in relation to insurance packaged
retail investment products as well as implementing technical standards as set
out in Article [30] regarding procedures and forms for submitting information
in relation to sanctions. These delegated acts and implementing technical
standards should be developed in draft by EIOPA.
(53)     Directive
95/46 of the European Parliament and of the Council of 24 October 1995 on the
protection of individuals with regard to the processing of personal data and on
the free movement of such data, under the supervision of the Member States
competent authorities, in particular the public independent authorities
designated by the Member States[23]
and Regulation (EU) No 45/2001 of the European Parliament and of the Council of
18 December 2000 on the protection of individuals with regard to the processing
of personal data by the EU institutions and bodies and on the free movement of
such data[24]
shall govern the processing of personal data carried out by EIOPA within the
framework of this Regulation, under the supervision of the European Data
Protection Supervisor. 
(54)     This
Directive respects the fundamental rights and observes the principles
recognised in the Charter of Fundamental Rights of the European Union, as enshrined
in the Treaty.
(55)     In
accordance with the Joint Political Declaration of Member States and the
Commission on explanatory documents of 28 September 2011, Member States have
undertaken to accompany, in justified cases, the notification of their
transposition measures with one or more documents explaining the relationship
between the components of a directive and the corresponding parts of national
transposition instruments. With regard to this Directive, the legislator
considers the transmission of such documents to be justified.
(56)     A
review of this Directive should be carried out five years after the date on
which this Directive enters into force in order to take account of market
developments as well as developments in other areas of Union law or Member
States experiences in implementation of Union law, in particular with regard to
products covered by Directive 2003/41/EC.
ê 2002/92/EC
recital 24 (adapted)
(57)     Directive 77/92/EEC
Ö 2002/92/ECÕ should
accordingly be repealed, Ö . Õ
ò new
(58)     The obligation to
transpose this Directive into national law should be confined to those
provisions which represent an amendment of the substance of Directive 2002/92/EC. The obligation to transpose
the provisions which are unchanged arises under Directive 2002/92/EC. 
(59)     This Directive
should be without prejudice to the obligations of the Member States relating to
the time-limits for transposition into national law of Directive 2002/92/EC,
ê 2002/92/EC
HAVE ADOPTED THIS DIRECTIVE:
CHAPTER I
SCOPE AND DEFINITIONS
Article 1
Scope
ê 2002/92/EC
(adapted)
ð new
1.           This Directive lays down rules
for
Ö concerning Õ the taking-up
and pursuit of the activities of insurance and reinsurance mediation, ð including professional management of
claims and loss adjusting, ï by natural and legal persons which are established in a Member
State or which wish to become Ö be Õ established
there.
ê 2002/92/EC
2.           This Directive shall not
apply to persons providing mediation services for insurance contracts if all the
following conditions are met:
(a)         
the insurance contract only requires knowledge
of the insurance cover that is provided;
(b)         
the insurance contract is not a life assurance
contract;
(c)         
the insurance contract does not cover any
liability risks;
(d)         
the principal professional activity of the
person is other than insurance mediation; 
ê 2002/92/EC
(adapted)
(e)         
the insurance is complementary to the product or service
Ö goods Õ supplied by
any provider, where such insurance covers: (i)
the risk of breakdown, loss of or damage to the
goods supplied by that provider, or Ö ; Õ
ê 2002/92/EC
(adapted)
ð new
(ii)      damage
to or loss of baggage and other risks linked to the travel booked with that provider, even if the insurance covers
life assurance or liability risks, provided that the cover is ancillary to the
main cover for the risks linked to that travel;
(f)           
the amount of the annual premium ð for the insurance contract, when
pro-rated to produce an annual amount, ï does not exceed EUR 500 Ö 600 Õ and the total duration of the insurance contract,
including any renewals, does not exceed five years.
ê 2002/92/EC
(adapted)
3.           This Directive shall not
apply to insurance and reinsurance mediation services provided in relation to
risks and commitments located outside the Community Ö Union Õ.
ê 2002/92/EC
ð new
This Directive shall not affect a Member
State's law in respect of insurance ð and reinsurance ï mediation business pursued by insurance and reinsurance ð undertakings or ï intermediaries established in a third country and operating on its
territory under the principle of freedom to provide services, provided that
equal treatment is guaranteed to all persons carrying out or authorised to
carry out insurance ð and reinsurance ï mediation activities on that market.
This Directive shall not regulate insurance ð or reinsurance ï mediation activities carried out in third countries nor activities of Community insurance or
reinsurance undertakings, as defined in First Council Directive 73/239/EEC
of 24 July 1973 on the coordination of laws, regulations and administrative
provisions relating to the taking-up and pursuit of the business of direct
insurance other than life assurance(8) and First Council Directive 79/267/EEC of 5 March 1979 on the coordination of
laws, regulations and administrative provisions relating to the taking-up and
pursuit of the business of direct life assurance(9), carried out through
insurance intermediaries in third countries.
ò new
Member States shall
inform the Commission of any general difficulties which their insurance
intermediaries encounter in establishing themselves or carrying out insurance
mediation activities in any third country.
ê 2002/92/EC
ð new
Article 2
Definitions
For the purposes of this Directive:
1.           'insurance undertaking'
means an undertaking which has received official authorisation in accordance
with Article 6 of Directive 73/239/EEC or Article 6 of Directive 79/267/EEC;
2.           'reinsurance undertaking'
means an undertaking, other than an insurance undertaking or a
non-member-country insurance undertaking, the main business of which consists
in accepting risks ceded by an insurance undertaking, a non-member-country
insurance undertaking or other reinsurance undertakings ð which has received official
authorisation in accordance with Article 3 of Directive 2005/68/EC ï;
ê 2002/92/EC
ð new
3.           'insurance mediation'
means the activities of introducing
ð advising on ï , proposing or carrying out other work preparatory to the
conclusion of contracts of insurance, or of
concluding such contracts,
or of assisting in the
administration and performance of such contracts, in particular in the event of
a claim ð , and the activity of professional
management of claims and loss adjusting ï. These activities when undertaken by an insurance
undertaking or an employee of an insurance undertaking who is acting under
the responsibility of the insurance undertaking shall not be considered as
insurance mediation. ð These activities shall be considered
to be insurance mediation also if carried on by an insurance undertaking
without the intervention of an insurance intermediary. ï
ò new
None of the following
activities shall be considered to be insurance mediation for the purposes of
this Directive:
ê 2002/92/EC
ð new
(a)         
Tthe provision of information on an incidental basis ð to a customer ï in the context of another professional activity provided that the purpose of that activity is not
ð , if the provider does not take any
additional steps ï to assist the customer in concluding or performing an insurance
contract, the management of claims of an insurance
undertaking on a professional basis, and loss adjusting and expert appraisal of
claims shall also not be considered as insurance mediation;
ò new
(b)         
the mere provision of
data and information on potential policyholders to insurance intermediaries or
insurance undertakings or of information about insurance products or an
insurance intermediary or insurance undertaking to potential policyholders.
4.           'insurance
investment product' means a contract of insurance which could be also
classified as an "investment product" as defined in Article 2(a) of [Regulation
on key information documents for investment products (PRIPs Regulation) ];
ê 2002/92/EC
ð new
5.           'insurance intermediary'
means any natural or legal person ð , other than an insurance
undertaking, ï who, for remuneration, takes up or pursues insurance mediation;
ê 2002/92/EC
ð new
64.         'reinsurance mediation' means the activities of introducing ð advising on ï , proposing or carrying out other work preparatory to the
conclusion of contracts of reinsurance, or
of concluding such contracts,
or of assisting in the
administration and performance of such contracts, in particular in the event of
a claim, ð and the activity of professional
management of claims and loss adjusting. ï These activities when undertaken by a
reinsurance undertaking or an employee of a reinsurance undertaking who is
acting under the responsibility of the reinsurance undertaking are not
considered as reinsurance mediation ð These activities shall be considered
to be reinsurance mediation also if carried on by a reinsurance undertaking
without the intervention of a reinsurance intermediary. ï
ò new
None of the following
activities shall be considered to be reinsurance mediation for the purposes of
this Directive: 
ê 2002/92/EC
(a)         
Tthe provision of information on an incidental basis in the context of
another professional activity provided that the purpose of that activity is not
to assist the customer in concluding or performing a reinsurance contract, the management of claims of a reinsurance
undertaking on a professional basis, and loss adjusting and expert appraisal of
claims shall also not be considered as reinsurance mediation;
ò new
(b)         
the mere provision of
data and information on potential policyholders to reinsurance intermediaries
or reinsurance undertakings or of information about reinsurance products or a
reinsurance intermediary or reinsurance undertaking to potential policyholders.

ê 2002/92/EC
ð new
76.         'reinsurance intermediary' means any natural or legal
person ð , other than a reinsurance
undertaking, ï who, for remuneration, takes up or pursues reinsurance mediation;
87.         'tied insurance intermediary' means any person who carries
on the activity of insurance mediation for and on behalf of one or more
insurance undertakings in the case of
insurance products which are not in competition but does not collect premiums
or amounts intended for the customer ð or insurance intermediaries, ï and who acts under the full responsibility of those insurance
undertakings for the products which concern them respectively. ð or insurance intermediaries, provided
that the insurance intermediaries under whose responsibility the person acts do
not themselves act under the responsibility of another insurance undertaking or
intermediary ï;
Any person who
carries on the activity of insurance mediation in addition to his principal
professional activity is also considered as a tied insurance intermediary
acting under the responsibility of one or several insurance undertakings for
the products which concern them respectively if the insurance is complementary to the goods or services supplied in the
framework of this principal professional activity and the person does not
collect premiums or amounts intended for the customer;
ò new
9.           'advice'
means the provision of a recommendation to a customer, either upon their
request or at the initiative of the insurance undertaking or the insurance
intermediary;
ò new
10.         'contingent
commission' means a remuneration in the form of a commission where the amount
payable is based on the achievement of agreed targets relating to the business
placed by the intermediary with that insurer;
ê 2002/92/EC
118.       'large risks' shall be as defined by Article 5(d) of
Directive 73/239/EEC;
129.       'home Member State' means:
(a)         
where the intermediary is a natural person, the
Member State in which his residence is situated and in which he
carries on business;
(b)         
where the intermediary is a legal person, the
Member State in which its registered office is situated or, if under its
national law it has no registered office, the Member State in which its head
office is situated;
ê 2002/92/EC
(adapted)
ð new
1310.     'host
Member State' means the Member State in which an insurance or reinsurance
intermediary has a branch
Ö permanent
presence or establishment Õ or provides
services ð and which is not its home Member
State ï;
1412.     'durable
medium' means a durable medium any instrument
which enables the customer to store information addressed
personally to him in a way accessible for future reference for a period of time
adequate to the purposes of the information and which allows
the unchanged reproduction of the information stored. ð as defined in Article 2(m) of Directive
2009/65/EC; ï In particular, durable medium covers floppy disks,
CD-ROMs, DVDs and hard drives of personal computers on which electronic mail is
stored, but it excludes Internet sites, unless such sites meet the criteria
specified in the first paragraph.
ò new
(15)        'cross-selling
practice' means the offering of an insurance service or product together with
another service or product as part of a package or as a condition of taking
another agreement or package;
(16)        'close
links' means a situation referred to in Article 4(31) of Directive [MIFID II];
(17)        'primary
place of business' means the location from where the main business is managed;
(18)        'remuneration'
means any commission, fee, charge or other payment, including an economic
benefit of any kind, offered or given in connection with insurance mediation
activities.
(19)        'tying
practice' means the offering of one or more ancillary services with an
insurance service or product in a package where this insurance service or product
is not made available to the consumer separately. 
(20)        'bundling
practice' means the offering of one or more ancillary services with an
insurance service or product in a package where this insurance service or
product is also made available to the consumer separately but not necessarily
on the same terms or conditions as when offered bundled with the ancillary
services.
ê 2002/92/EC
(adapted)
ð new
CHAPTER II
REGISTRATION REQUIREMENTS
Article 3
Registration 
1.           ð Except as provided in Article 4, ï Iinsurance
and reinsurance intermediaries shall be registered with a competent authority as defined in Article 7(2),
in their home Member State. ð Insurance undertakings registered in
Member States under Directive
73/239/EEC, Directive 2002/83/EC and Directive 2005/68/EC and their employees
shall not be required to register again under this Directive. ï
Without prejudice to the first subparagraph, Member
States may stipulate that insurance
and reinsurance undertakings and other bodies may collaborate Ö cooperate Õ with the
competent authorities in registering insurance and reinsurance intermediaries
and in the application of the requirements of Article 4
8 to such intermediaries. In
particular, in the case of tied insurance intermediaries, they may be
registered by an insurance undertaking or,
by an association of insurance undertakings ð , or by an insurance or reinsurance
intermediary ï under the supervision of a competent authority.
ò new
Member States may
stipulate that, where an insurance or reinsurance intermediary acts under the
responsibility of an insurance or reinsurance undertaking or of another registered
insurance or reinsurance intermediary, the latter intermediary or the
undertaking shall be responsible for ensuring that it meets the conditions for
registration set out in this Directive. In such a case, the person or entity
accepting responsibility shall, having been informed by the Member States of
the matters set out in paragraph 7 of this Article, sub-paragraphs (a) and (b),
be satisfied as to the matter set out in paragraph 7 of this Article,
sub-paragraph (c). Member States may also stipulate that the person or entity
which takes responsibility for the intermediary shall register that
intermediary.
ê 2002/92/EC
ð new
Member States need not apply the requirement
referred to in the first and second subparagraphs to all the natural persons
who work in an ð insurance or reinsurance ï undertaking ð or a registered insurance or
reinsurance intermediary ï and ð who ï pursue the activity of insurance or reinsurance mediation.
ê 2002/92/EC
(adapted)
As
regards legal persons, Member States
shall register such
Ö ensure
the registration of legal Õ persons and
shall also specify in the register the names of the natural persons within the
management who are responsible for the mediation business.
2.           Member States may
establish more than one register for insurance and reinsurance intermediaries
provided that they lay down the criteria according to which intermediaries are
to be registered.
ò new
Member States shall
establish an online registration system consisting of one single registration
form available on an internet website, which should be easily accessible for
insurance intermediaries and undertakings, and allowing the form to be
completed directly online.
ê 2002/92/EC
3.           Member States shall see to
it that a single information point is established allowing quick and easy
access to information from these various registers, which shall be compiled
electronically and kept constantly updated. This information point shall also
provide the identification details of the competent authorities of each Member
State referred to in paragraph 1, first subparagraph. The register shall indicate
further the country or countries in which the intermediary conducts business
under the rules on the freedom of establishment or on the freedom to provide
services.
ò new
4.           EIOPA
shall establish, publish on its website and keep up-to-date a single electronic
register containing records of insurance and reinsurance intermediaries which
have notified their intention to carry on cross-border business in accordance
with Chapter IV. Member States shall provide relevant information to EIOPA
promptly to enable it to do this. This register shall show a hyperlink to each
relevant competent authority in each Member State. That register shall contain
links to, and be accessible from, each of the Member States' competent
authorities' websites.
ê 2002/92/EC
3 Member States shall ensure that registration of insurance intermediaries
- including tied ones -– and reinsurance intermediaries is made subject to the
fulfilment of the professional requirements laid down in Article 4
8.
Member States shall also ensure that insurance intermediaries
- including tied ones - and reinsurance intermediaries who cease to fulfil
these requirements are removed from the register. The validity of the
registration shall be subject to a regular review by the competent authority.
If necessary, the home Member State shall inform the host Member State of such
removal by any appropriate means.
ò new
5.           Member
States shall ensure that the competent authorities do not register an insurance
or reinsurance intermediary unless it is satisfied that the intermediary meets
the requirements laid down in Article 8.
ê 2002/92/EC
ð new
4. The competent authorities may provide the insurance and reinsurance
intermediaries with a document enabling any interested party by consultation of
ð any of ï the register(s)
referred to in paragraph 2 to verify that they are duly registered.
That document shall at least provide the
information specified in Article 12(1)(a) and (b)16(a) and (b), and, in the case of a
legal person, the name(s) of the natural person(s) referred to in the fourth
subparagraph of paragraph 1 of this Article.
The Member State shall require the return of
the document to the competent authority which issued it when the insurance or
reinsurance intermediary concerned ceases to be registered.
5. Registered
insurance and reinsurance intermediaries shall be allowed to take up and pursue
the activity of insurance and reinsurance mediation in the Community by
means of both freedom of establishment and freedom to provide services.
ò new
6.           Member
States shall provide that applications by intermediaries for inclusion in the
register shall be treated within six months of the submission of a complete
application, and that the applicant shall be notified promptly of the decision. 
Member States shall ensure
that the competent authorities have in place appropriate measures enabling them
to monitor whether insurance and reinsurance intermediaries continue to meet
the registration requirements of this Directive at all times.
7.           Member
States shall ensure that their competent authorities request the following
information from insurance and reinsurance intermediaries, as a condition of
registration:
(a)         
to provide information
to their competent authorities of the identities of shareholders or members, whether
natural or legal persons, that have a holding in the intermediary that exceeds 10%
and the amounts of those holdings;
(b)         
to provide information
to their competent authorities of the identities of persons who have close
links with the insurance or reinsurance intermediary;
(c)         
to demonstrate in a
satisfactory manner that the
holdings or close links do not prevent
the effective exercise of the supervisory functions of the competent authority.
8.           Member States shall ensure that the competent
authorities refuse registration if the laws, regulations or administrative
provisions of a third country governing one or more natural or legal persons
with which the insurance or
reinsurance intermediary has
close links, or difficulties involved in the enforcement of those laws,
regulations or administrative provisions, prevent the effective exercise of their
supervisory functions.
CHAPTER III
SIMPLIFIED REGISTRATION PROCEDURE – DECLARATION OF ACTIVITIES
Article 4
 Declaration procedure for providing ancillary insurance mediation;
professional management of claims or loss assessment services 
1.           The
registration requirements in Article 3 shall not apply to an insurance intermediary
which conducts insurance mediation on an ancillary basis, provided that its
activities meet all the following conditions:
(a)                   
the principal
professional activity of the insurance intermediary is other than insurance
mediation; 
(b)                   
the insurance
intermediary only mediates certain insurance products that are complementary to
a product or service and clearly identifies them in the declaration; 
(c)                   
the insurance products
concerned do not cover life assurance or liability risks, unless that cover is
incidental to the main cover. 
2.           The
registration requirements in Article 3 shall not apply to insurance
intermediaries whose sole activity is professional management of claims or loss
assessment services.
3.           Any
insurance intermediary who is subject to paragraphs 1 and 2 of this Article
shall submit to the competent authority of its home Member State a declaration
whereby it informs the competent authority of its identity, address and
professional activities. 
4.           Intermediaries
who are subject to paragraphs 1 and 2 of this Article shall be subject to the
provisions of Chapters I, III, IV, V, VIII, IX and Articles 15 and 16 of this
Directive.
CHAPTER IV 
FREEDOM TO
PROVIDE SERVICES AND FREEDOM OF ESTABLISHMENT 
ê 2002/92/EC
(adapted)
ð new
Article 65
Notification of
establishment and services in other Member States
Ö Exercise
of the freedom to provide services Õ
1.           Any insurance or
reinsurance intermediary intending Ö who
intends Õ to carry on
business ð within the territory of another
Member State ï for the first time in one or more
Member States under the freedom to provide services or the freedom of establishment
shall inform ð communicate the following
information to ï the competent authorities Ö authority Õ of the Ö his Õ home Member
State .
Within a period of
one month after such notification, those competent authorities shall inform
the competent authorities of any host Member States wishing to know, of the
intention of the insurance or reinsurance intermediary and shall at the same
time inform the intermediary concerned.
The insurance or
reinsurance intermediary may start business one month after the date on
which he was informed by the competent authorities of the home Member State of
the notification referred to in the second subparagraph. However, that
intermediary may start business immediately if the host Member State does not wish to be informed of the fact.
2.Member States
shall notify the Commission of their wish to be informed in accordance with
paragraph 1. The Commission shall in turn notify all the Member States of this.
3.The competent
authorities of the host Member State may take the necessary steps to ensure
appropriate publication of the conditions under which, in the interest of the
general good, the business concerned must be carried on in their territories.
ò new
(a)         
the name, address and
any registration number of the intermediary; 
(b)         
the Member State or
States in which the intermediary intends to operate;
(c)         
the category of
intermediary and, if applicable, the name of any insurance or reinsurance
undertaking represented; 
(d)         
the relevant classes
of insurance, if applicable;
(e)         
demonstration of
professional knowledge and ability.
2.           The
competent authority of the home Member State shall, within one month of
receiving the information referred to in paragraph 1, forward it to the
competent authority of the host Member State, which shall acknowledge the
receipt without delay. The home Member State shall inform the insurance or
reinsurance intermediary in writing that the information has been received by
the host Member State and that the insurance or reinsurance undertaking can
commence its business in the host Member State.
When receiving the
information referred to in paragraph 1, the host Member State shall accept
previous experience in insurance or reinsurance mediation activity, as
demonstrated by proof of registration or declaration in the home Member State,
as evidence of the required knowledge and ability. 
3.           The
proof of the previous registration or declaration shall be established by
evidence of registration issued or declaration received by the competent authority
or body of the home Member State of the applicant, which the latter shall
submit in support of his application presented to the host Member State.
4.           In
the event of a change in any of the particulars communicated in accordance with
paragraph 1, the insurance or reinsurance intermediary shall give written
notice of that change to the competent authority of the home Member State at
least one month before implementing the change. The competent authority of
the host Member State shall also be informed of that change by the competent
authority of the home Member State as soon as is practicable and no later than
one month from the date of receipt of the information by the competent
authority of the home Member State.
Article 6
 Exercise of the freedom of establishment 
1.           Member
States shall require any insurance or reinsurance intermediary who intends to
exercise his freedom of establishment to establish a branch within the territory of
another Member State first to notify the competent authority of his home Member
State and to provide it with the following information:
(a)         
the name, address and
registration number (where applicable) of the intermediary;
(b)         
the Member State
within the territory of which he plans to establish a branch or permanent
presence;
(c)         
the category of
intermediary and, if applicable, the name of any insurance or reinsurance
undertaking represented ; 
(d)         
the relevant classes
of insurance, if applicable;
(e)         
a programme of
operations setting out, the insurance or reinsurance mediation activities to be
carried on and the organisational structure of the establishment; also indicating
the identity of agents where the intermediary intends to use them
;
(f)           
the address in the
host Member State from which documents may be obtained; 
(g)         
the name of any person
responsible for the management of the establishment or permanent presence. 
2.           Unless
the competent authority of the home Member State has grounds for considering
the organisational structure or the financial situation of the insurance or
reinsurance intermediary to be inadequate, taking into account the mediation
activities envisaged, it shall, within one month of receiving the information
referred to in paragraph 1, communicate it to the competent authority of the
host Member State, which shall acknowledge the receipt without delay. The home
Member State shall inform the insurance or reinsurance intermediary in writing
that the information has been received by the host Member State and that the
insurance or reinsurance undertaking can commence its business in the host
Member State.
3.           Where
the competent authority of the home Member State refuses to communicate the
information to the competent authority of the host Member State, it shall give
reasons for its refusal to the insurance or reinsurance intermediary within one
month of receiving all the information referred to in paragraph 1.
4.           In the event of a change in
any of the particulars communicated in accordance with paragraph 1, an
insurance or reinsurance intermediary shall give written notice of that change
to the competent authority of the home Member State at least one month before implementing
the change. The competent authority of the host Member State shall also be
informed of that change by the competent authority of the home Member State as
soon as is practicable and no later than one month from the date of receipt of
the information by the competent authority of the home Member State.
Article 7 
Division of competence between home and host Member States
1.           If
an insurance intermediary's primary place of business is located in another Member
State, then the competent authority of that other Member State may agree with
the home Member State competent authority to act as if it were the home Member
State competent authority with regard to the obligations in chapters VI, VII
and VIII of this Directive. In the event of such an agreement, the home Member
State competent authority shall notify the insurance intermediary and EIOPA without
delay. 
2.           The
competent authority of the host Member State shall assume responsibility for
ensuring that the services provided by the establishment within its territory
comply with the obligations laid down in Chapters VI and VII and in measures
adopted pursuant thereto.
The competent
authority of the host Member State shall have the right to examine
establishment arrangements and to request such changes as are strictly needed
to enable the competent authority to enforce the obligations under Chapter VI
and Chapter VII and measures adopted pursuant thereto with respect to the services
or activities provided by the establishment within its territory.
3.           Where
the host Member State has grounds for concluding that an insurance or
reinsurance intermediary acting within its territory under the freedom to
provide services or through an establishment is in breach of any obligation set
out in this Directive it shall refer those findings to the competent authority
of the home Member State which shall take the appropriate measures. In cases
where, despite measures taken by the competent authority of the home Member
State, an insurance or reinsurance intermediary persists in acting in a manner
that is clearly prejudicial to the interests of host Member State consumers or
the orderly functioning of insurance and reinsurance markets, the insurance or
reinsurance intermediary shall be subject to the following measures:
(a)         
the competent
authority of the host Member State, after informing the competent authority of
the home Member State, shall take all the appropriate measures needed in order
to protect consumers and the proper functioning of insurance and reinsurance markets
including by preventing the offending insurance or reinsurance intermediaries
from initiating any further transactions within its territory; the competent
authority of the host Member State shall inform the Commission of such measures
without undue delay; 
(b)         
the competent
authority of the host Member State may refer the matter to EIOPA and request
its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010; in
that case, EIOPA may act in accordance with the powers conferred on it by that Article
in cases of a disagreement between the competent authorities of the host and
home Member States.
4.           Where
the competent authorities of a host Member State ascertain that an insurance or
reinsurance intermediary who has an establishment within its territory is in
breach of the legal or regulatory provisions adopted in that Member State
pursuant to those provisions of this Directive which confer powers on the host
Member State's competent authorities, those authorities shall require the
insurance or reinsurance intermediary concerned to put an end to this situation.
In cases where,
despite measures taken by the competent authority of the host Member State, an
insurance or reinsurance intermediary persists in acting in a manner that is
clearly prejudicial to the interests of host Member State consumers or the
orderly functioning of insurance and reinsurance markets, the insurance or
reinsurance intermediary shall be subject to the following measures:
(a)         
the competent
authority of the host Member State, after informing the competent authority of
the home Member State, shall take all the appropriate measures needed in order
to protect consumers and the proper functioning of the markets including by
preventing the offending insurance or reinsurance intermediaries from
initiating any further transactions within its territory; the competent
authority of the host Member State shall inform the Commission of such measures
without undue delay; 
(b)         
the competent
authority of the host Member State may refer the matter to EIOPA and request
its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010;
in that case, EIOPA may act in accordance with the powers conferred on it by
that Article in cases of a disagreement between the competent authorities of
the host and home Member States.
CHAPTER V
OTHER ORGANISATIONAL
REQUIREMENTS 
ê 2002/92/EC
ð new
Article 48 
Professional ð and organisational ï requirements
ê 2002/92/EC
ð new
1.           Insurance and reinsurance
intermediaries ð , including those who pursue these
activities on an ancillary basis, persons carrying on the activities of the
professional management of claims, loss adjusting or expert appraisal of
claims, and members of staff of insurance undertakings carrying out insurance
mediation activities, ï shall possess appropriate knowledge and ability, as determined by
the home Member State of the intermediary ð or undertaking, to complete their
tasks and perform their duties adequately, demonstrating appropriate
professional experience relevant to the complexity of the products they are mediating ï.
ò new
Member States shall ensure
that insurance and reinsurance intermediaries and members of staff of insurance
undertakings carrying out insurance mediation activities update their knowledge
and ability through continuing professional development in order to maintain an
adequate level of performance.
ê 2002/92/EC
(adapted)
ð new
Home Member States may adjust the required conditions with regard to
knowledge and ability in line with the ð particular ï activity of insurance or reinsurance mediation and the products distributed
Ö mediated Õ, particularly
if the principal professional activity of the intermediary is other than
insurance mediation. In such cases, that intermediary may pursue an activity of
insurance mediation only if an insurance intermediary fulfilling the conditions
of this Article or an insurance undertaking assumes full responsibility for his Ö the
intermediary's Õ actions.
Member States may provide that,
for
Ö in Õ the cases
referred to in the second subparagraph of Article 3(1), the insurance
undertaking ð or intermediary ï shall verify that the knowledge and ability of the intermediaries
are in conformity with the obligations set out in the first subparagraph of
this paragraph and, if need be, shall provide such intermediaries with training
which corresponds to the requirements concerning the products sold by the intermediaries.
Member States need not apply the requirement
referred to in the first subparagraph of this paragraph to all the natural
persons working in an ð insurance ï undertaking ð or insurance or reinsurance intermediary ï who pursue the activity of insurance or reinsurance mediation.
Member States shall ensure that a reasonable proportion of the persons within
the management structure of such undertakings who are responsible for mediation
in respect of insurance ð and reinsurance ï products and all other persons directly involved in insurance or
reinsurance mediation demonstrate the knowledge and ability necessary for the
performance of their duties.
2.           Insurance and reinsurance
intermediaries ð and members of staff of insurance
undertakings carrying out insurance mediation activities ï shall be of good repute. As a minimum, they shall have a clean
police record or any other national equivalent in relation to serious criminal
offences linked to crimes against property or other crimes related to financial
activities and they should not have previously been declared bankrupt, unless
they have been rehabilitated in accordance with national law.
Member States may, in accordance with the
provisions of the second subparagraph of Article 3(1), allow the insurance
undertaking to check the good repute of insurance intermediaries.
Member States need not apply the requirement
referred to in the first subparagraph of this paragraph to all the natural
persons who work in an ð insurance ï undertaking ð or insurance and reinsurance
intermediary ï and who pursue the activity of insurance and reinsurance mediation.
Member States shall ensure that the management structure of such undertakings
and any staff directly involved in insurance or reinsurance mediation fulfil
that requirement.
ê 2002/92/EC
(adapted)
ð new
3.           Insurance and reinsurance
intermediaries shall hold professional indemnity insurance covering the whole
territory of the Community
Ö Union Õ or some other
comparable guarantee against liability arising from professional negligence,
for at least EUR 1000000
Ö 1,120,000 Õ applying to
each claim and in aggregate EUR 1500000 Ö 1,680,000 Õ per year for
all claims, unless such insurance or comparable guarantee is already provided
by an insurance undertaking, reinsurance undertaking or other undertaking on
whose behalf the insurance or reinsurance intermediary is acting or for which
the insurance or reinsurance intermediary is empowered to act or such
undertaking has taken on full responsibility for the intermediary's actions.
ê 2002/92/EC
(adapted)
ð new
4            Member States shall take
all necessary measures to protect customers against the inability of the
insurance intermediary to transfer the premium to the insurance undertaking or
to transfer the amount of claim or return premium to the insured.
Such measures shall take any one or more of the
following forms:
(a)         
provisions laid down by law or contract whereby
monies paid by the customer to the intermediary are treated as having been paid
to the undertaking, whereas monies paid by the undertaking to the intermediary
are not treated as having been paid to the customer until the customer actually
receives them;
(b)         
a requirement for insurance intermediaries to
have financial capacity amounting, on a permanent basis, to 4 % of the sum of
annual premiums received, subject to a minimum of EUR 15000 Ö 16800 Õ;
(c)         
a requirement that customers' monies shall be
transferred via strictly segregated client Ö customer Õ accounts and
that these accounts shall not be used to reimburse other creditors in the event
of bankruptcy;
(d)         
a requirement that a guarantee fund be set up.
5.           Pursuit of the activities
of insurance and reinsurance mediation shall require that the professional
requirements set out in this Article be fulfilled on a permanent basis.
6.           Member States may
reinforce the requirements set out in this Article or add other requirements
for insurance and reinsurance intermediaries registered within their
jurisdiction.
7.           ð EIOPA shall review ï the amounts referred
to in paragraphs 3 and 4 shall be reviewed
regularly in order to take account of changes in the European Index of Consumer
Prices as published by Eurostat. The first review shall take place five years
after the entry into force of this Directive and the successive reviews every
five years after the previous review date.
The amounts shall
be adapted automatically by increasing the base amount in euro by the
percentage change in that Index over the period between the entry into force of
this Directive and the first review date or between the last review date and
the new review date and rounded up to the nearest euro.
EIOPA shall develop
draft regulatory standards which adapt the base amount in euro referred to in
paragraphs 3 and 4 by the percentage change in that Index over the period
between the entry into force of this Directive and the first review date or
between the last review date and the new review date and rounded up to the
nearest euro.
EIOPA shall submit
those draft regulatory technical standards to the Commission five years after
the entry into force of this Directive and the successive reviews every five
years after the previous review date.
Power is conferred on
the Commission to adopt the implementing technical standards referred to in the
first subparagraph in accordance with Article 15 of Regulation (EU) No
1094/2010.
ò new
8.           The
Commission shall be empowered to adopt delegated acts in accordance with
Article 33. Those delegated acts shall specify 
(a)         
the notion of adequate
knowledge and ability of the intermediary when carrying on insurance mediation
with its customers as referred to in paragraph 1 of this Article;
(b)         
appropriate criteria
for determining in particular the level of professional qualifications,
experiences and skills required for carrying on insurance mediation;
(c)         
the steps that
insurance intermediaries and insurance undertakings might reasonably be
expected to take to update their knowledge and ability through continuing
professional development in order to maintain an adequate level of performance.
ê 2002/92/EC
Article 5
Retention of
acquired rights
Member States may
provide that those persons who exercised a mediation activity before 1
September 2000, who were entered in a register and who had a level of training
and experience similar to that required by this Directive, shall be
automatically entered in the register to be created, once the requirements set down in Article 4(3) and (4) are complied
with.
ò new
Article 9 
Publication of general good rules
1.           Member
States shall take the necessary steps to ensure appropriate publication by
their competent authorities of the relevant national legal provisions
protecting the general good which are applicable to the carrying on of
insurance and reinsurance mediation business in their territories.
2.           A
Member State which proposes to apply and applies provisions regulating
insurance intermediaries and the sale of insurance products in addition to
those set out in this Directive shall ensure that the administrative burden
stemming from these provisions is proportionate for consumer protection. The
Member State shall continue to monitor these provisions to ensure they remain
so.
3.           EIOPA
shall present a standardised information sheet for general good rules to be
completed by the competent authorities in each Member State. It shall include
the hyperlinks to the websites of competent authorities where information on
general good rules is published. Such information shall be updated by the
national competent authorities on a regular basis and EIOPA shall make this
information available on its website in the English, French and German
languages, with all national general good rules categorised into different relevant
areas of law.
4.           Member
States shall establish a single point of contact responsible for providing
information on general good rules in their respective Member State. Such a
point of contact should be an appropriate competent authority.
5.           EIOPA
shall examine in a report and inform the Commission about the general good
rules published by Member States as referred to in this Article in the context
of the proper functioning of this Directive and the Internal Market before X X
20XX [three years after the entry into force of the Directive]. 
ê 2002/92/EC
Article 710
Competent authorities
1.           Member States shall
designate the competent authorities empowered to ensure implementation of this
Directive. They shall inform the Commission thereof, indicating any division of
those duties.
2.           The authorities referred
to in paragraph 1 shall be either public authorities or bodies recognised by
national law or by public authorities expressly empowered for that purpose by
national law. They shall not be insurance or reinsurance undertakings.
3.           The competent authorities
shall possess all the powers necessary for the performance of their duties.
Where there is more than one competent authority on its territory, a Member
State shall ensure that those authorities collaborate closely so that they can
discharge their respective duties effectively.
ò new
Article 8
Sanctions
1. Member States
shall provide for appropriate sanctions in the event that a person
exercising the activity of insurance or reinsurance mediation is not registered
in a Member State and is not referred to in Article 1(2).
2. Member States
shall provide for appropriate sanctions against insurance or reinsurance
undertakings which use the insurance or reinsurance mediation services of
persons who are not registered in a Member State and who are not referred to in
Article 1(2).
3. Member States
shall provide for appropriate sanctions in the event of an insurance or
reinsurance intermediary's failure to comply with national provisions
adopted pursuant to this Directive.
4. This Directive
shall not affect the power of the host Member States to take appropriate
measures to prevent or to penalise irregularities committed within their
territories which are contrary to legal or regulatory provisions adopted in the
interest of the general good. This shall include the possibility of preventing
offending insurance or reinsurance intermediaries from initiating any further
activities within their territories.
5. Any measure
adopted involving sanctions or restrictions on the activities of an insurance
or reinsurance intermediary must be properly justified and communicated to the
intermediary concerned. Every such measure shall be subject to the right to
apply to the courts in the Member State which adopted it.
ê 2002/92/EC
(adapted)
ð new
Article 911
Exchange of information between Member States
1.           The competent authorities
of the various Member States shall cooperate in order to ensure the proper
application of the provisions of this Directive.
2.           The competent authorities
shall exchange information on insurance and reinsurance intermediaries if they
have been subject to a sanction referred to in Article 8(3) or a measure
referred to in Article 8(4) Ö Chapter
VIII Õ and such
information is likely to lead to removal from the register of such
intermediaries. The competent authorities may also exchange any relevant
information at the request of an authority.
3.           All persons required to
receive or divulge information in connection with this Directive shall be bound
by professional secrecy, in the same manner as is laid down in Article 16 of Council
Directive 92/49/EEC of 18 June 1992 on the coordination
of laws, regulations and administrative provisions relating to direct insurance
other than life assurance and amending Directives 73/239/EEC and 88/357/EEC
(third non-life insurance Directive)(10) and
Article 15 of Council Directive 92/96/EEC of
10 November 1992 on the coordination of laws, regulations and administrative
provisions relating to direct life assurance and amending Directives 79/267/EEC
and 90/619/EEC (third life assurance Directive)(11).
Article 1012
Complaints
Member States shall ensure that procedures
are set up which allow customers and other interested parties, especially
consumer associations, to register complaints about insurance and reinsurance
intermediaries ð and undertakings ï. In all cases complaints shall receive replies.
ê 2002/92/EC
Article 1113
Out-of-court redress
ê 2002/92/EC
(adapted)
ð new
1.           Member
States shall encourage Ö ensure Õ the
setting-up of appropriate, and effective, ð impartial and independent ï complaints and redress procedures for the out-of-court settlement
of disputes between insurance intermediaries and customers, ð and between insurance undertakings
and customers, ï using existing bodies where appropriate. ð Member States shall further ensure
that all insurance undertakings and insurance intermediaries participate in the
procedures for the out-of-court settlement of disputes where the following
conditions are met:
(a)         
the procedure results
in decisions which are not binding;
(b)         
[the running of] the
limitation period for bringing the dispute before a court is suspended for the
duration of the procedure for alternative dispute resolution;
(c)         
the period of
prescription of the claim is suspended for the duration of the procedure;
(d)         
the procedure is free
of charge or at moderate costs;
(e)         
electronic means are
not the only means by which the parties can gain access to the procedure and;
(f)           
interim measures are
possible in exceptional cases where the urgency of the situation so requires. ï
2.           Member
States shall encourage Ö ensure that Õ these bodies to cooperate in
the resolution of cross-border disputes.
Article 16 14
Transposition
Ö Restriction
on use of intermediaries Õ
ê 2002/92/EC
(adapted)
ð new
Member States shall ensure that insurance ð and reinsurance ï undertakings ð and intermediaries ï use the insurance and reinsurance mediation services only of
registered insurance and reinsurance intermediaries and Ö or Õ of the persons
referred to in Article 1(2) ð or of the persons who have fulfilled
the declaration procedure referred to in Article 4 ï.
CHAPTER VI
III
ê 2002/92/EC
(adapted)
INFORMATION REQUIREMENTS FOR INTERMEDIARIES
Ö AND
CONDUCT OF BUSINESS RULES Õ
ò new
Article 15 
General
principle
1.           Member
States shall require that, when carrying out insurance mediation with or for
customers, an insurance intermediary or insurance undertaking acts honestly,
fairly and professionally in accordance with the best interests of its
customers.
2.           All
information, including marketing communications, addressed by the insurance
intermediary or insurance undertaking to customers or potential customers shall
be fair, clear and not misleading. Marketing communications shall be clearly
identifiable as such.
ê 2002/92/EC
ð new
Article 1216
 ð General ï information provided by the insurance intermediary ð or insurance undertaking ï 
ò new
Member States
shall lay down rules ensuring that
(a)                   
prior to the
conclusion of any insurance contract, an insurance intermediary - including
tied ones- shall make the following disclosures to customers:
(i)      its identity
and address and that it is an insurance intermediary; 
(ii)     whether or
not it provides any type of advice about the insurance products sold; 
ê 2002/92/EC
(eiii)   the procedures referred to in
Article 10 12
allowing customers and other interested parties to register complaints about
insurance and reinsurance intermediaries and, if appropriate,
about the out-of-court complaint and redress procedures referred to in Article 11.
13;
ò new
(iv)    the register
in which it has been included and the means for verifying that it has been
registered; and
(v)     whether the
intermediary is representing the customer or is acting for and on behalf of the
insurance undertaking;
(b)                   
prior to the
conclusion of any insurance contract, an insurance undertaking shall make the
following disclosures to customers:
(i)      its identity
and address and that it is an insurance undertaking; 
(ii)     whether or
not it provides any type of advice about the insurance products sold; 
(iii)     the
procedures referred to in Article 12 allowing customers and other interested
parties to register complaints about insurance undertakings and about the
out-of-court complaint and redress procedures referred to in Article 13.
ê 2002/92/EC
(adapted)
Article
12 17
 Ö Conflicts
of interest and transparency Õ
ê 2002/92/EC
(adapted)
ð new
1.           Prior to the conclusion of
any initial insurance
contract, and, if necessary, upon amendment or renewal
thereof, an insurance intermediary ð – including tied ones – ï shall provide the customer with at least the following information:
(a)         
his identity and
address;
(b)         
the register in
which he has been included and the means for verifying that he has been
registered;
(ca)   whether he Ö it Õ has a holding,
direct or indirect, representing more than 10% of the voting rights or of the
capital in a given insurance undertaking;
(db)   whether a given insurance
undertaking or parent undertaking of a given insurance undertaking has a
holding, direct or indirect, representing more than 10% of the voting rights or
of the capital in the insurance intermediary;
ê 2002/92/EC
(adapted)
ð new
(c)     In addition, an insurance intermediary shall
inform the customer, concerning ð in relation ï to the contract that is provided Ö proposed Õ, whether:
(i)      he Ö it Õ gives advice based on the obligation
in paragraph 2 to provide Ö on the
basis of Õ a fair
analysis, or
ê 2002/92/EC
(adapted)
(ii)      he Ö it Õ is under a
contractual obligation to conduct insurance mediation business exclusively with
one or more insurance undertakings. In that case, it shall, at the customer's
request, provide the names of those insurance
undertakings, or
(iii)     he Ö it Õ is not under a
contractual obligation to conduct insurance mediation business exclusively with
one or more insurance undertakings and does not give advice based on the obligation
in paragraph 2 to provide Ö on the
basis of Õ a fair
analysis. In that case, it shall, at the customer's request,
provide the names of the insurance undertakings with which it may and does
conduct business.
Ö ; Õ
In those cases
where information is to be provided solely at the customer's request, the
customer shall be informed that he has the right to request such
information.
ò new
(d)     the nature
of the remuneration received in relation to the insurance contract;
(e)     whether in
relation to the insurance contract, it works:
(i)      on the
basis of a fee, that is the remuneration paid directly by the customer; or 
(ii)      on the
basis of a commission of any kind, that is the remuneration included in the
insurance premium; or
(iii)     on the
basis of a combination of both (i) and (ii); 
(f)      if the
intermediary will receive a fee or a commission of any kind, the full amount of
the remuneration concerning the insurance products being offered or considered
or, where the precise amount is not capable of being given, the basis of
calculation of all the fee or commission or the combination of both; 
(g)     if the amount
of the commission is based on the achievement of agreed targets or thresholds
relating to the business placed by the intermediary with an insurer, the
targets or thresholds as well as the amounts payable on the achievement of
them.
2.           By
derogation from paragraph 1 (f) for five years from the date on which this
Directive comes into force, the intermediary of insurance contracts other than
contracts in any of the classes specified in Annex I of Directive 2002/83/EC,
shall, prior to the conclusion of any such insurance contract, if the
intermediary is to be remunerated by a fee or commission, 
(a)         
provide the customer
with the amount or, where the precise amount is not capable of being given, the
basis of calculation of the fee or commission or the combination of both, if
the customer so requests.
(b)         
inform the customer of
his right to request the information referred to in point (a).
3.           The
insurance undertaking or insurance intermediary shall also inform the customer
about the nature and the basis of the calculation of any variable remuneration
received by any employee of theirs for distributing and managing the insurance
product in question. 
4.           If
any payments are made by the customer under the insurance contract after its
conclusion, the insurance undertaking or intermediary shall also make the
disclosures in accordance with this Article for each such payment.
5.           The
Commission shall be empowered to adopt delegated acts in accordance with
Article 33. Those delegated acts shall specify:
(a)         
appropriate criteria
for determining how the remuneration of the intermediary - including contingent
commission – shall be disclosed to the customer as referred to in paragraph 1
(f ) and (g) and paragraph 2 of this Article;
(b)         
appropriate criteria
for determining in particular the basis of calculation of all the fee or
commission or the combination of both; 
(c)         
the steps that
insurance intermediaries and insurance undertakings might reasonably be expected
to take to disclose their remuneration to the customer.
ê 2002/92/EC
(adapted)
ð new
Article 1218
ð Advice, and standards for sales
where no advice is given ï
31.         Prior to the conclusion of any specific contract, the
insurance intermediary ð –including tied ones– or insurance
undertaking ï shall at least specify
Ö indentify Õ , in particular on the
basis of information provided by the customer,:
(a)     the demands and the needs of that customer; as well as
(b)     Ö and shall
specify to the customer Õ the underlying
reasons for any advice given to
the customer on a given
Ö specified Õ insurance
product ð , if given ï.
32.         These details ð referred to in points (a) and (b) of
paragraph 1 ï shall be modulated according to the complexity of the insurance contract
Öproduct Õ being proposed
ð and the level of financial risk to
the customer ï.
ê 2002/92/EC
(adapted)
ð new
23.         When the insurance intermediary ð or the insurance undertaking ï informs the customer
that he
Ö it Õ gives his Ö its Õ advice on the
basis of a fair analysis, he Ö it Õ is obliged to
give that advice on the basis of an analysis of a sufficiently large number of
insurance contracts available on the market, to enable him Ö it Õ to make a
recommendation, in accordance with professional criteria, regarding which
insurance contract would be adequate to meet the customer's needs.
ò new
4.           Prior
to the conclusion of a contract, whether or not advice is given, the insurance
intermediary or insurance undertaking shall give the customer the relevant
information about the insurance product in a comprehensible form to allow the
customer to make an informed decision, while taking into account the complexity
of the insurance product and the type of costumer.
ê 2002/92/EC
(adapted)
ð new
Article 12
19
 ð Information exemptions and
flexibility clause ï 
41.         The information referred to in paragraphs 1,2 and 3 Ö Articles 16,
17 and 18 Õ need not be
given when the insurance intermediary or insurance undertaking mediates in the
insurance of large risks, nor
in the case of mediation by reinsurance intermediaries ð or reinsurance undertakings, or in
relation to professional customers as specified in the Annex ï.
52.         Member States may maintain or adopt stricter provisions
regarding the information requirements referred to in paragraph 1 Ö Articles 16,
17 and 18 Õ provided that
such provisions comply with Community Ö Union Õ law. Member
States shall communicate to ð EIOPA and ï the Commission the Ö such Õ national
provisions set out in the first subparagraph.
3.           In order to establish a high level of transparency by all
appropriate means, the Commission ð EIOPA ï shall ensure that the information it receives relating to national
provisions is also communicated to consumers,
and insurance
intermediaries ð and insurance undertakings ï.
ê 2002/92/EC
(adapted)
ð new
Article 1320
Information conditions
1.           All information to be
provided to customers in
accordance with Articles 12 Ö 16, 17
and 18 Õ shall be
communicated ð to the customers ï : 
(a)         
on paper or on any other
durable medium available and accessible to the customer;
(b)         
in a clear and accurate manner, comprehensible
to the customer; ð and ï
ê 2002/92/EC
ð new
(c)         
in an official language of the Member State ð in which the risk is situated or the
Member State ï of the commitment or in any other language agreed by the parties. ð It shall be provided free of charge.ï
ò new
2.           By
way of derogation from paragraph 1(a), the information referred to in Articles
16,17 and 18 may be provided to the customer in one of the following media: 
(a)         
using a durable medium
other than paper, where the conditions laid down in paragraph 4 are met; or
(b)     by means of a
website where the conditions laid down in paragraph 5 are met.
3.           However,
where the information referred to in Articles 16, 17 and 18 is provided using a
durable medium other than paper or by means of a website, a paper copy shall be
provided to the customer upon request and free of charge. 
4.           The
information referred to in Articles 16, 17 and 18 may be provided using a
durable medium other than paper if the following conditions are met: 
(a)         
the use of the durable
medium is appropriate in the context of the business conducted between the
intermediary or insurance undertaking and the customer; and 
(b)         
the customer has been
given the choice between information on paper and in the durable medium, and
has chosen that other medium.
5.           The
information referred to in Articles 16, 17 and 18 may be provided by the means
of a website if it is addressed personally to the customer or if the following
conditions are met: 
(a)         
the provision of the information
referred to in Articles 16, 17 and 18 by means of a website is appropriate in
the context of the business conducted between the intermediary or insurance
undertaking and the customer; 
(b)         
the customer has
consented to the provision of the information referred to in Articles 16, 17
and 18 by means of a website;
(c)         
the customer has been
notified electronically of the address of the website, and the place on the
website where the information referred to in Articles 16, 17 and 18 can be
accessed;
(d)         
it is ensured that the
information referred to in Articles 16, 17 and 18 remains accessible on the
website for such period of time as the customer reasonably need to consult it.
6.           For
the purposes of paragraph 4 and 5, the provision of information using a durable
medium other than paper or by means of a website shall be regarded as
appropriate in the context of the business conducted between the intermediary or
insurance undertaking and the customer, if there is evidence that the customer
has regular access to the Internet. The provision by the customer of an e-mail
address for the purposes of that business shall be regarded as such evidence. 
ê 2002/92/EC
(adapted)
ð new
73.         In the
case of telephone selling, the prior information given to the customer shall be
in accordance with Community
Ö Union Õ rules
applicable to the distance marketing of consumer financial services. Moreover,
information shall be provided to the customer in accordance with paragraph 1 ð or 2 ï immediately after the conclusion of the insurance contract.
ò new
Article 21
Cross-selling 
1.           Member
States shall allow bundling practices but not tying practices.
2.           When
an insurance service or product is offered together with another service or
product as a package, the insurance undertaking or, where applicable, the
insurance intermediary shall offer and inform the customer that it is possible
to buy the components of the package separately and shall provide information
of the costs and charges of each component of the package that may be bought
through or from it separately. 
3.           EIOPA
shall develop, by 31 December [20XX] at the latest, and update periodically,
guidelines for the assessment and the supervision of cross-selling practices
indicating, in particular, situations in which cross-selling practices are not
compliant with obligations set out in Articles 16, 17 and 18 or paragraph 1 of
this Article.
CHAPTER VII
ADDITIONAL
CUSTOMER PROTECTION REQUIREMENTS IN RELATION TO INSURANCE INVESTMENT PRODUCTS
Article 22
Scope
This Chapter applies
additional requirements to insurance mediation, when carried on in relation to
the sale of insurance investment products by:
(a)                   
an insurance
intermediary;
(b)                   
an insurance
undertaking.
Article 23
Conflicts of interest
1.           Member
States shall require insurance intermediaries and insurance undertakings to
take all appropriate steps to identify conflicts of interest between
themselves, including their managers, employees and tied insurance
intermediaries, or any person directly or indirectly linked to them by control
and their customers or between one customer and another that arise in the
course of carrying on insurance mediation. 
2.           Where
steps taken by the insurance intermediary or insurance undertaking in
compliance with Articles 15, 16 and 17 are not sufficient to ensure, with
reasonable confidence, that risks of damage to the interests of customers and
potential customers arising from conflicts of interest will be prevented, the insurance
intermediary or insurance undertaking shall clearly disclose the general nature
or sources of conflicts of interest to the customer before undertaking business
on the customer's behalf.
3.           The
Commission shall be empowered to adopt delegated acts in accordance with
Article 33 to specify :
(a)         
the steps and
effective organisational and administrative arrangements that insurance
intermediaries and insurance undertakings might reasonably be expected to take
to identify, prevent, manage and disclose conflicts of interest when providing
insurance mediation;
(b)         
appropriate criteria
for determining the types of conflict of interest whose existence may damage
the interests of the customers or potential customers of the insurance
intermediary or insurance undertaking.
Article 24
General principles and information to customers
1.           Member
States shall require that, when carrying out insurance mediation with or for customers,
an insurance intermediary or insurance undertaking acts honestly, fairly and
professionally in accordance with the best interests of its customers and complies,
in particular, with the principles set out in this Article and in Article 25.
2.           All
information, including marketing communications, addressed by the insurance
intermediary or insurance undertaking to customers or potential customers shall
be fair, clear and not misleading. Marketing communications shall be clearly
identifiable as such.
3.           Appropriate
information shall be provided to customers or potential customers about:
(a)         
the insurance
intermediary or insurance undertaking and its services. When advice is
provided, information shall specify whether the advice is provided on an
independent basis and whether it is based on a broad or on a more restricted
analysis of the market and shall indicate whether the insurance intermediary or
insurance undertaking will provide the customer with the on-going assessment of
the suitability of the insurance product recommended to the customer;
(b)         
insurance products and
proposed investment strategies. This should include appropriate guidance on and
warnings of the risks associated with investments in those products or in
respect of particular investment strategies; and
(c)         
costs and associated
charges.
4.           The
information referred to in this Article should be provided in a comprehensible
form in such a manner that the customers or potential customers are reasonably
able to understand the nature and risks of the specific insurance product that
is being offered and, consequently, to take investment decisions on an informed
basis. This information may be provided in a standardised format.
5.           When
the insurance intermediary or insurance undertaking informs the customer that
insurance advice is provided on an independent basis, the insurance
intermediary or insurance undertaking shall:
(a)         
assess a sufficiently
large number of insurance products available on the market. The insurance
products should be diversified with regard to their type and issuers or product
providers and should not be limited to insurance products issued or provided by
entities having close links with the insurance intermediary or insurance
undertaking; and
(b)         
not accept or receive
fees, commissions or any monetary benefits paid or provided by any third party
or a person acting on behalf of a third party in relation to the provision of
the service to customers.
6.           The
Commission shall be empowered to adopt delegated acts in accordance with
Article 33 concerning measures to ensure that insurance intermediaries and
insurance undertakings comply with the principles set out in this Article when carrying
on insurance mediation with their customers. Those delegated acts shall specify:
(a)         
the nature of the
service(s) offered or provided to the customer or potential customer, taking
into account the type, object, size and frequency of the transactions; and
(b)         
the nature of the
products being offered or considered including different types of insurance
products.
Article 25
Assessment of suitability and appropriateness and reporting to customers 
1.           When
providing advice the insurance intermediary or insurance undertaking shall
obtain the necessary information regarding the customer's or potential customer's
knowledge and experience in the field relevant to the specific type of product
or service, as well as regarding the customer's or potential customer's financial
situation and his investment objectives, on the basis of which the insurance
intermediary or insurance undertaking should recommend the insurance products
that are suitable for the customer or potential customer.
2.           Member
States shall ensure that insurance intermediaries and insurance undertakings,
when carrying on insurance mediation in relation to sales where no advice is
given, ask the customer or potential customer to provide information regarding the
customer's or potential customer's knowledge and experience in the investment
field relevant to the specific type of product or service offered or demanded
so as to enable the insurance intermediary or insurance undertaking to assess
whether the insurance service or product envisaged is appropriate for the
customer.
Where the insurance
intermediary or insurance undertaking considers, on the basis of the
information received under the previous subparagraph, that the product or
service is not appropriate to the customer or potential customer, the insurance
intermediary or insurance undertaking shall warn the customer or potential
customer. This warning may be provided in a standardised format.
Where customers or
potential customers do not provide the information referred to in the first
subparagraph, or where they provide insufficient information regarding their
knowledge and experience, the insurance intermediary or insurance undertaking
shall warn them that the insurance intermediary or insurance undertaking is not
in a position to determine whether the service or product envisaged is
appropriate for them. This warning may be provided in a standardised format.
3.           The
insurance intermediary or insurance undertaking shall establish a record that
includes a document or documents such as a contract which has been agreed
between the insurance intermediary or insurance undertaking and the customer
that set out the rights and obligations of the parties, and the other terms on
which the insurance intermediary or insurance undertaking will provide services
to the customer. The rights and duties of the parties to the contract may be
incorporated by reference to other documents or legal texts.
4.           The
customer must receive from the insurance intermediary or insurance undertaking
adequate reports on the service provided to its customers. These reports shall
include periodic communications to customers, taking into account the type and
the complexity of insurance products involved and the nature of the service
provided to the customer and shall include, where applicable, the costs
associated with the transactions and services undertaken on behalf of the
customer. When providing advice, the insurance intermediary or insurance
undertaking shall specify how the advice given meets the personal
characteristics of the customer.
5.           The
Commission shall be empowered to adopt delegated acts in accordance with
Article 33 to ensure that insurance intermediaries and insurance undertakings
comply with the principles set out in this Article when carrying on insurance mediation
with their customers. Those delegated acts shall specify :
(a)         
the nature of the
service(s) offered or provided to the customer or potential customer, taking
into account the type, object, size and frequency of the transactions;
(b)         
the nature of the
products being offered or considered including different types of insurance
products.
CHAPTER VIII 
SANCTIONS AND
MEASURES
Article 26
Administrative sanctions and measures
1.           Member
States shall ensure that their administrative sanctions and measures are
effective, proportionate and dissuasive.
2.           Member
States shall ensure that where obligations apply to insurance or reinsurance
undertakings or insurance or reinsurance intermediaries, in case of a breach,
administrative sanctions and measures can be applied to the members of their
management body, and any other natural or legal persons who, under national
law, are responsible for a breach.
3.           The
competent authorities shall be given all investigatory powers that are
necessary for the exercise of their functions. In the exercise of their
sanctioning powers, the competent authorities shall cooperate closely to ensure
that sanctions or measures produce the desired results and coordinate their
action when dealing with cross border cases.
Article 27
Publication of sanctions
Member States
shall provide that the competent authority publishes any sanction or measure
that has been imposed for breaches of the provisions of the national provisions
adopted in the implementation of this Directive without undue delay including
information on the type and nature of the breach and the identity of persons
responsible for it, unless such disclosure would seriously jeopardise insurance
and reinsurance markets. Where the publication would cause a disproportionate
damage to the parties involved, the competent authorities shall publish the
sanctions on an anonymous basis.
Article 28
Breaches 
1.           This
article shall apply to the following:
(a)         
an insurance or
reinsurance intermediary who is not registered in a Member State and who does
not fall within Article 1(2) or Article 4;
(b)         
a person providing
ancillary insurance activities without having submitted a declaration as laid
down in Article 4, or who has submitted such a declaration but in respect of
whom the requirements set out in Article 4 are not met;
(c)         
an insurance or
reinsurance undertaking or insurance or reinsurance intermediary using the
insurance or reinsurance mediation services of persons who are neither registered
in a Member State nor referred to in Article 1(2), and who have not submitted a
declaration under Article 4;
(d)         
an insurance or
reinsurance intermediary having obtained a registration through false
statements or any other irregular means in breach of Article 3;
(e)         
an insurance or
reinsurance intermediary or insurance undertaking failing to meet the
provisions of Article 8;
(f)           
an insurance
undertaking or insurance or reinsurance intermediary failing to comply with
conduct of business requirements in accordance with Chapter VI and VII.
2.           Member
States shall ensure that in the cases referred to in paragraph 1, the
administrative sanctions and measures that can be applied include at least the
following:
(a)         
a public statement,
which indicates the natural or legal person and the nature of the breach;
(b)         
an order requiring the
natural or legal person to cease the conduct and to desist from a repetition of
that conduct;
(c)         
in case of an
insurance or reinsurance intermediary, withdrawal of registration in accordance
with Article 3;
(d)         
a ban against any
member of the management body of the insurance or reinsurance intermediary or
insurance or reinsurance undertaking or any other natural person, who is held
responsible, to exercise functions in insurance intermediaries or reinsurance
intermediaries, or insurance or reinsurance undertakings;
(e)         
in case of a legal
person, administrative pecuniary sanctions of up to 10 % of the total annual
turnover of the legal person in the preceding business year; where the legal
person is a subsidiary of a parent undertaking, the relevant total annual
turnover shall be the total annual turnover resulting from the consolidated
accounts of the ultimate parent undertaking in the preceding business year;
(f)           
in case of a natural
person, administrative pecuniary sanctions of up to 5 000 000 EUR, or in the
Member States where the Euro is not the official currency, the corresponding
value in the national currency on the date of entry into force of this
Directive; and
Where the benefit
derived from the breach can be determined, Member States shall ensure that the
maximum level is no lower than twice the amount of that benefit.
Article 29
Effective application of sanctions
1.           Member
States shall ensure that when determining the type of administrative sanctions
or measures and the level of administrative pecuniary sanctions, the competent
authorities shall take into account all relevant circumstances, including:
(a)         
the gravity and the
duration of the breach;
(b)         
the degree of
responsibility of the responsible natural or legal person;
(c)         
the financial strength
of the responsible natural or legal person, as indicated by the total turnover
of the responsible legal person or the annual income of the responsible natural
person;
(d)         
the importance of
profits gained or losses avoided by the responsible natural or legal person,
insofar as they can be determined;
(e)         
the losses for third
parties caused by the breach, insofar as they can be determined;
(f)           
the level of
cooperation of the responsible natural or legal person with the competent
authority; and
(g)         
previous breaches by
the responsible natural or legal person.
2.           EIOPA
shall issue guidelines addressed to the competent authorities in accordance
with Article 16 of Regulation No (EU) 1094/2010 on the types of administrative
measures and sanctions and level of administrative pecuniary sanctions.
3.           This
Directive shall not affect the power of the host Member States to take
appropriate measures to prevent or to penalise irregularities committed within
their territories which are contrary to legal or regulatory provisions adopted
in the interest of the general good. This shall include the possibility of
preventing offending insurance or reinsurance intermediaries from initiating
any further activities within their territories.
Article 30
Reporting of breaches
1.           Member
States shall ensure that the competent authorities establish effective
mechanisms to encourage reporting of breaches of national provisions
implementing this Directive to the competent authorities.
2.           Those
arrangements shall include at least:
(a)         
specific procedures
for the receipt of reports and their follow-up;
(b)         
appropriate protection
for employees of insurance or reinsurance undertakings or intermediaries who
denounce breaches committed within them; and
(c)         
protection of personal
data concerning both the person who reports the breaches and the natural person
who is allegedly responsible for a breach, in compliance with the principles
laid down in Directive 95/46/EC.
Article 31
Submitting information to EIOPA in relation to sanctions
1.           Member
States shall provide EIOPA annually with aggregated information regarding all
administrative measures or administrative sanctions imposed in accordance with
Article 26.
EIOPA shall publish
this information in an annual report.
2.           Where
the competent authority has disclosed an administrative measure or
administrative sanction to the public, it shall contemporaneously report that
fact to EIOPA. 
3.           EIOPA
shall develop draft implementing technical standards on procedures and forms
for submitting information as referred to in this Article.
EIOPA shall submit
those draft implementing technical standards to the Commission by [XX/ insert
concrete date 6 months after entry into force/application of this Directive].
Power is conferred on
the Commission to adopt the implementing technical standards referred to in the
first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.

ê 2002/92/EC
CHAPTER IV
IX 
FINAL PROVISIONS
Article 14
Right to apply to
the courts
Member States
shall ensure that decisions taken in respect of an insurance intermediary,
reinsurance intermediary or an insurance undertaking under the laws,
regulations and administrative provisions adopted in accordance with this
Directive may be subject to the right to apply to the courts.
ò new
Article 32
Data Protection
1.           Member
States shall apply Directive 95/46/EC to the processing of personal data
carried out in the Member States pursuant to this Directive.
2.           Regulation
(EC) No 45/2001 shall apply to the processing of personal data carried out by
EIOPA pursuant to this Directive.
Article 33
Delegated acts
The Commission
shall be empowered to adopt delegated acts in accordance with Article 34 concerning
Articles 8, 17, 23, 24 and 25.
Article 34
Exercise of the delegation
1.           The
power to adopt delegated acts is conferred on the Commission subject to the
conditions laid down in this Article.
2.           The
power to adopt delegated acts referred to in Articles 8, 17, 23, 24 and 25 shall
be conferred on the Commission for an indeterminate period of time from the
date of entry into force of this Directive.
3.           The
delegation of powers referred to in Articles 8, 17, 23, 24 and 25 may be
revoked at any time by the European Parliament or by the Council. A decision of
revocation shall put an end to the delegation of the power specified in that
decision. It shall take effect the day following the publication of the
decision in the Official Journal of the European Union or at a later date
specified therein. It shall not affect the validity of any delegated acts
already in force.
4.           As
soon as it adopts a delegated act, the Commission shall notify it
simultaneously to the European Parliament and to the Council.
5.           A
delegated act adopted pursuant to Articles 8, 17, 23, 24 and 25 shall enter
into force only if no objection has been expressed either by the European
Parliament or the Council within a period of 2 months of notification of that
act to the European Parliament and the Council or if, before the expiry of that
period, the European Parliament and the Council have both informed the
Commission that they will not object. That period shall be extended by 2 months
at the initiative of the European Parliament or the Council.
Article 35
Review and evaluation
1.           Five
years after the entry into force of this Directive, the Commission shall review
this Directive. The review shall include a general survey of the practical
application of rules laid down in this Directive taking due account of
developments in the retail investment products markets as well as experiences
acquired in practical application of this Directive and Regulation on key
information documents for investment products and [MIFID II]. The review shall
reflect on a possible application of the provisions of this Directive to
products falling under the scope of Directive 2003/41/EC. This review shall also include a specific analysis of the impact of
Article 17(2), taking into account the situation of competition on the market
of intermediation services for contracts other than contracts in any of the
classes specified in Annex I of Directive 2002/83/EC and the impact of the
obligations referred to in Article 17(2) on insurance intermediaries which are
small and medium sized enterprises.
2.           After
consulting the Joint Committee of European Supervisory Authorities, the
Commission shall submit a first report to the European Parliament and the
Council.
3.           By
X X 20XX [four years after the entry into force of the Directive], and at least
on a two-year basis thereafter, EIOPA shall prepare a second report on the
application of this Directive. EIOPA shall consult ESMA before making public
its report. 
4.           In
a third report to be prepared by X X 20XX [two years after the entry into force
of the Directive], EIOPA shall undertake an evaluation of the structure of
insurance intermediaries' markets.
5.           A
report to be prepared by EIOPA by X X 20XX [four years after the entry into
force of the Directive] as referred to in paragraph 3 shall examine whether the
competent authorities referred to in Article 10(1) are sufficiently empowered
and have adequate resources to carry out their tasks.
6.           The
report referred to in paragraph 3 shall examine at least the following issues:
(a)         
the changes in the insurance
intermediaries' market structure;
(b)         
the changes in the patterns
of cross-border activity;
(c)         
an interim assessment
on the improvement of quality of advice and selling methods and the impact of this
Directive on insurance intermediaries which are small and medium-sized
enterprises .
7.           That
same report shall also include an evaluation by EIOPA of the impact of this
Directive.
ê 2002/92/EC
(adapted)
ð new
Article 1636
Transposition
1.           Member States shall bring
into force the laws, regulations and administrative provisions necessary to
comply with this Directive before 15 January 2005 ð Articles
[1-39] and Annex I of the Directive by [date] at
the latest ï. They shall forthwith inform Ö communicate to Õ the Commission thereof ð the
text of those provisions ï.
These measures ð When
Member States adopt those provisions, they ï shall contain
a reference to this Directive or shall
be accompanied by such a reference
on the occasion of their official publication. ð They
shall also include a statement that references in existing laws, regulations
and administrative provisions to the directive repealed by this Directive shall
be construed as references to this Directive ï The
methods of making ð Member
States shall determine how ï such
reference shall be laid down by the Member States
ð is
to be made and how that statement is to be formulated ï.
2.           Member States shall
communicate to the Commission the text of the ð main provisions of national ï laws, regulations and administrative provisions
which they adopt in the field governed Ö covered Õ by this Directive. In that communication they shall provide a table
indicating the national provisions corresponding to this Directive.
Article 1537
Repeal
Directive 77/92/EEC Ö 2002/92/EC Õ is hereby repealed with effect from [date of adoption
20XX]the date referred to in Article 16(1)
ð , without prejudice to the
obligations of the Member States relating to the time‑limit for
transposition into national law of that Directive. ï
ò new
References to the repealed Directive shall be construed as references to
this Directive.
ê 2002/92/EC
(adapted)
ð new
Article1738
Entry into force
This Directive shall enter into force on
the ð twentieth ï day of its publication in the Official Journal of the European Communities
Ö Union Õ.
ê 2002/92/EC
Article 1839
Addressees
This
Directive is addressed to the Member States.
Done at Strasbourg, 
For the European Parliament                       For the Council
ò new
ANNEX I 
PROFESSIONAL CUSTOMERS 
A professional
customer is a customer who possesses the experience, knowledge and expertise to
make his own decisions and properly assess the risks that he incurs. The
following should all be regarded as professionals in all insurance services and
activities and insurance products for the purposes of the Directive.
1.           Entities
which are required to be authorised or regulated to operate in the financial
markets. The list below should be understood as including all authorised
entities carrying out the characteristic activities of the entities mentioned:
entities authorised by a Member State under a Directive, entities authorised or
regulated by a Member State without reference to a Directive, and entities
authorised or regulated by a non-Member State:
(a)         
Credit institutions;
(b)         
Insurance and
reinsurance intermediaries and investment firms;
(c)         
Other authorised or
regulated financial institutions;
(d)         
Insurance and
reinsurance undertakings;
(e)         
Collective investment
schemes and management companies of such schemes;
(f)           
Pension funds and
management companies of such funds;
(g)         
Commodity and
commodity derivatives dealers;
(h)         
Locals;
(i)           
Other institutional investors;
2.           Large
undertakings meeting two of the following size requirements on a company basis:
–              
balance sheet total:
EUR 20,000,000
–              
net turnover: EUR 40,000,000
–              
own funds: EUR 2,000,000.
3.           National
and regional governments, including public bodies that manage public debt at
national or regional level, Central Banks, international and supranational
institutions such as the World Bank, the IMF, the ECB, the EIB and other
similar international organisations.
4.           Other
institutional investors whose main activity is to invest in financial
instruments, including entities dedicated to the securitisation of assets or
other financing transactions. The entities mentioned above are considered to be
professionals. They must however be allowed to request non-professional
treatment and firms may agree to provide a higher level of protection. Where
the customer of a firm is an undertaking referred to above, the firm must
inform it prior to any provision of services that, on the basis of the
information available to the firm, the customer is deemed to be a professional
customer, and will be treated as such unless the firm and the customer agree
otherwise. The firm must also inform the customer that he can request a
variation of the terms of the agreement in order to secure a higher degree of
protection.
It is the
responsibility of the customer, considered to be a professional customer, to
ask for a higher level of protection when it deems it is unable to properly
assess or manage the risks involved. This higher level of protection will be
provided when a customer who is considered to be a professional enters into a
written agreement with the firm to the effect that it shall not be treated as a
professional for the purposes of the applicable conduct of business regime.
Such agreement should specify whether this applies to one or more particular
services or transactions, or to one or more types of product or transaction.
ò new
ANNEX II
EXPLANATORY DOCUMENTS
In accordance
with the Joint Political Declaration of Member States and the Commission on
explanatory documents of 28 September 2011, Member States have undertaken to
accompany, in justified cases, the notification of their transposition measures
with one or more documents explaining the relationship between the components
of a directive and the corresponding parts of national transposition
instruments.
With regard to
this Directive, the Commission considers the transmission of such documents to
be justified for the following reasons:
Complexity of
the Directive and of the sector concerned:
The field of
insurance and distribution of insurance products is particularly complicated
and can be very technical from the point of view of professionals who are not
specialised in it. In the absence of well-structured explanatory documents, the
task of overseeing the transposition would be disproportionately
time-consuming. The current proposal represents a review where the text of the
Insurance Mediation Directives (IMD) was recasted. Even though many of the
provisions have not changed as to their substance, a number of new provisions
have been introduced, and a number of existing provisions have been revised or
deleted. The structure, form, and presentation of the texts are completely new.
The new structure has been necessary to give a clearer and more logical order
to the legal provisions but it will result in the need for a structured
approach during the transposition supervision.
Some of the
provisions of the proposed Directive may potentially have an impact on a number
of areas of the national legal order such as the company, commercial or tax law
or other legislative areas in the Member States. It may also affect secondary
national law including Acts and general conduct of business rules for Financial
or Insurance Intermediaries. The interrelation of matters with all these
neighbouring fields may mean, depending on the system in the Member States,
that some provisions are implemented by means of new or already existing rules
from those fields, a clear view of which should be available.
Consistency
and interrelation with other initiatives:
The current
proposal is tabled for adoption as part of a 'Consumer Retail Package'
together with the PRIPs proposal on product disclosures (Regulation on key
information documents on investment products and amending Directives 2003/71/EC
and 2009/65/EC) and UCITS V. The PRIPs initiative aims at ensuring a coherent
horizontal approach to product disclosure with regard to investment products
and insurance products with investment elements (so-called insurance
investments), and provisions on selling practices will be included in the
revisions of the IMD and MiFID (Markets
in Financial Instruments Directive). The proposal is furthermore consistent with, and complementary to,
other EU legislation and policies, particularly in the areas of consumer
protection, investor protection and prudential supervision, such as Solvency II
(Directive 2009/138/EC), MiFID II (the recast of MiFID), and the
above mentioned PRIPs initiative.
The new IMD would
continue to have the features of a "minimum harmonisation" legal
instrument. This means that Member States may decide to go further if necessary
for the purposes of consumer protection. However, the minimum standards of IMD
will be raised significantly. Some parts of the new Directive will be
reinforced by Level 2 measures in order to align the rules with MiFID II: in
particular, in the chapter regulating the distribution of life insurance
policies with investment elements (hereafter: insurance investments - see
below). This aims to harmonise the sales of investment insurances across the EU
through Level 2 measures[25]. This is an innovation as compared to the
text of the original Directive. It is important that the Commission shall be in
a position to compare the resulting situations in the various Member States and
thus properly carry out its task of overseeing the application of Union law.
Moreover, a revision clause is considered in the directive and, in order to be
able to collect all relevant information on the functioning of those rules, the
Commission will need to be able to monitor their implementation from the
outset.
Chapter on
insurance investment: The
text of the proposal features a Chapter introducing additional customer
protection requirements in relation to insurance investment products.
There is a strong
political will to put such provisions in place but, at the same time, there is
very little experience as this is a new area. Therefore, it is of high
importance that the Commission receives transposition documents on how the
Member States have given effect to such provisions. 
Low estimated
additional administrative burden stemming from requesting explanatory documents
from Member States: As
mentioned above, the current text has been in place since 2002 (when the
original Directive was adopted). Therefore, it will not be burdensome for
Member States to notify their implementing provisions as they have normally
been notifying most of them for quite some time already. The estimated low
additional administrative burden of requesting explanatory documents from
Member States regarding the new parts of the Directive is proportionate and
necessary for the Commission to carry out its task of overseeing the
application of Union law.
On the basis of
the above, the Commission believes that the requirement to provide explanatory
documents in the case of the proposed Directive is proportionate and does not
go beyond what is necessary to achieve the objective to carry out efficiently
the task of overseeing accurate transposition.
ò new
LEGISLATIVE
FINANCIAL STATEMENT
1.           FRAMEWORK OF THE
PROPOSAL/INITIATIVE 
              1.1.    Title of the proposal/initiative 
              1.2.    Policy area(s) concerned in the ABM/ABB structure
              1.3.    Nature of the proposal/initiative 
              1.4.    Objective(s) 
              1.5.    Grounds for the proposal/initiative 
              1.6.    Duration and financial impact 
              1.7.    Management method(s) envisaged 
2.           MANAGEMENT MEASURES 
              2.1.    Monitoring and reporting rules 
              2.2.    Management and control system 
              2.3.    Measures to prevent fraud and irregularities 
3.           ESTIMATED FINANCIAL
IMPACT OF THE PROPOSAL/INITIATIVE 
              3.1.    Heading(s) of the multiannual financial framework
and expenditure budget line(s) affected 
              3.2.    Estimated impact on expenditure 
              3.2.1. Summary
of estimated impact on expenditure 
              3.2.2. Estimated
impact on operational appropriations 
              3.2.3. Estimated
impact on appropriations of an administrative nature
              3.2.4. Compatibility
with the current multiannual financial framework
              3.2.5. Third-party
participation in financing 
              3.3.    Estimated
impact on revenue
LEGISLATIVE FINANCIAL STATEMENT
1.           FRAMEWORK OF THE
PROPOSAL/INITIATIVE 
1.1.        Title
of the proposal/initiative 
Directive of the European Parliament and
of the Council on Insurance Mediation (IMD2) repealing the Directive 2002/92/EC
on Insurance Mediation (IMD1)
1.2.        Policy
area(s) concerned in the ABM/ABB structure[26]

Internal Market – Financial markets
1.3.        Nature
of the proposal/initiative 
X The
proposal/initiative relates to a new action 
¨ The proposal/initiative relates to a new action
following a pilot project/preparatory action[27]

¨The proposal/initiative relates to the
extension of an existing action 
¨ The proposal/initiative relates to an action
redirected towards a new action 
1.4.        Objectives
1.4.1.     The
Commission's multiannual strategic objective(s) targeted by the
proposal/initiative 
to increase the safety and the efficiency
of the financial markets; to boost the internal market for financial services.
1.4.2.     Specific
objective(s) and ABM/ABB activity(ies) concerned 
to create a level playing field; to reduce
conflicts of interest; to improve advice for complex products; to reduce the
burden for cross-border entry.
1.4.3.     Expected
result(s) and impact
Specify the
effects which the proposal/initiative should have on the beneficiaries/groups
targeted.
The proposal aims at: extending the scope
of application of IMD to all distribution channels; identifying, managing and
mitigating conflicts of interest; raising the level of harmonisation of
administrative sanctions for infringements of sales rules; enhancing the
suitability and the objectiveness of advice; ensuring sellers' professional
qualifications match the complexity of products sold; simplifying and
approximating the procedure for cross-border entry to markets across the EU.
1.4.4.     Indicators
of results and impact 
Specify the
indicators for monitoring implementation of the proposal/initiative.
Reports should be prepared on consumer
protection; progress made in achieving undistorted competition; developments on
cross-border business, impact of the proposed measures on insurance markets.
1.5         Grounds
for the proposal/initiative 
1.5.1.     Requirement(s)
to be met in the short or long term 
As a result of the application of the
revised Directive in Member States:
•        The new rules would broaden
consumer choice and quality of service received.
•        Improved information and
increased transparency are likely to lead to better competition and benefit
efficient intermediaries.
•        The authorisation and supervision
of insurance intermediaries and other sellers of insurance products would be
harmonised and the coordination between national supervisors would be improved.
•        All sellers of insurance products
operating in the EU would be regulated appropriately, taken into account
proportionality and the need of SMEs.
•        Professional qualifications for
all sellers of insurances will match the complexity of the product sold.
•        More cross–border entry is
predicted.
•        Sanctioning regime would be
increased by creating an appropriate and harmonised framework to prevent and
address key violations of the Directive.
1.5.2.     Added
value of EU involvement
1) A regulatory patchwork can lead to
increased administrative costs and regulatory arbitrage.
2) A lack of action at EU level will
likely result in an increase in the number of cases of mis-selling of insurance
products.
1.5.3.     Lessons
learned from similar experiences in the past
Sale practices of pure investment products
are already regulated by the Market in Financial Instruments Directive (MiFID),
while those substitutable investment-based insurances will also be regulated in
a similar manner at EU level once the IMD 2 proposal is approved. MiFID has
resulted in more competition between financial instruments, more choice for
investors and better consumer protection rules.
1.5.4.     Coherence
and possible synergy with other relevant instruments
The proposed review of the IMD follows the
reform programme proposed by the European Commission in its Communication
Driving European Recovery, the 'Europe 2020 Strategy' for smart, sustainable
and inclusive growth. It is also coherent and consistent with the PRIPs
initiative, MiFID II proposal and Solvency II. 
1.6         Duration
and financial impact 
ý Proposal/initiative of limited duration[28] 
–              
¨         Proposal/initiative in effect
from [DD/MM]YYYY to [DD/MM]YYYY 
–              
X          Financial
impact from 2014 to 2016 
¨      Proposal/initiative of unlimited
duration
–              
Implementation with a
start-up period from YYYY to YYYY,
–              
followed by full-scale
operation.
1.7.        Management
mode(s) envisaged[29]

¨ Centralised direct management by the Commission 
¨ Centralised indirect management with the delegation of implementation
tasks to:
–              
¨         executive agencies 
–              
ý         bodies set up by the Communities[30]
–              
¨         national public-sector
bodies/bodies with public-service mission 
–              
¨         persons entrusted with the
implementation of specific actions pursuant to Title V of the Treaty on
European Union and identified in the relevant basic act within the meaning of
Article 49 of the Financial Regulation 
¨ Shared management with the Member States 
¨ Decentralised management with third countries 
¨ Joint management with international organisations (to
be specified)
If more than one
management mode is indicated, please provide details in the
"Comments" section.
Comments 
-
2.           MANAGEMENT
MEASURES 
2.1.        Monitoring
and reporting rules 
Specify frequency
and conditions.
Article 81 of the draft Regulation
establishing the European Insurance and Occupational Pension Authority (EIOPA)
provides for the evaluation of the experience acquired at a result of the
operation of EIOPA within three years from the effective start of its
operation. To this end, the Commission will publish a general report that will
be forwarded to the European Parliament and to the Council.
2.2.        Management
and control system 
2.2.1.     Risk(s)
identified 
The additional resource to EIOPA foreseen
as a result of the current proposal is needed in order to allow EIOPA to carry
out its competences and notably its role in:
•        Establishing, publishing and
keeping up to date a single electronic register;
•        Ensuring harmonisation and
coordination of rules of the IMD 2 by drafting regulatory standards;
•        Reinforcing and ensuring
consistent application of national regulatory powers by issuing guidelines and
by drafting implementing technical standards;
•        Gathering and publishing
information in relation to sanctions and general good rules;
•        Monitoring and evaluation of the
proposal (3 reports).
The lack of this resource could not ensure
a timely and efficient fulfilment of the role of EIOPA.
2.2.2.     Control
method(s) envisaged 
Management and control systems as provided
for in the EIOPA Regulation will apply also with regard to the role of EIOPA
according to the present proposal. 
2.3.        Measures
to prevent fraud and irregularities 
Specify existing
or envisaged prevention and protection measures.
For the purposes of combating fraud,
corruption and any other illegal activity, the ions of Regulation (EC) No
1073/1999 of the European Parliament and of the Council of 25 May 1999
concerning investigations conducted by the European Anti-Fraud Office (OLAF)
shall apply to the EIOPA without any restriction.
EIOPA shall accede to the
Interinstitutional Agreement of 25 May 1999 between the European Parliament,
the Council of the European Union and the Commission of the European
Communities concerning internal investigations by the European Anti-Fraud
Office (OLAF) and shall immediately adopt appropriate provisions for all EIOPA
staff.
3.           ESTIMATED FINANCIAL
IMPACT OF THE PROPOSAL/INITIATIVE 
3.1.        Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected 
·              
Existing expenditure
budget lines 
In order of multiannual financial framework
headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Description………………………...……….] || Diff./non-diff. ([31]) || from EFTA[32] countries || from candidate countries[33] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
   || 12.0403.01 [EIOPA – Subsidy under Titles 1 and 2 (Staff and administrative expenditure)]   || Diff. || YES || NO || NO || NO 
·              
New budget lines
requested 
In order of multiannual financial framework
headings and budget lines.
3.2.        Estimated
impact on expenditure 
3.2.1.     Summary
of estimated impact on expenditure 
EUR million (to 3 decimal places)
 Heading of multiannual financial framework: || Number || Competitiveness for Growth and Employment 
 DG: MARKT ||   ||   || Year 2014[34] || Year 2015 || Year 2016 ||   || … enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL 
  Operational appropriations ||   ||   ||   ||   ||   ||   ||   ||   
 12.0404.01   || Commitments || (1) || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
 Payments || (2) || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
 Appropriations of an administrative nature financed  from the envelope for specific programmes[35] ||   ||   ||   ||   ||   ||   ||   ||   
 Number of budget line ||   || (3) ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations for DG MARKT || Commitments || =1+1a +3 || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
 Payments || =2+2a +3 || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
  TOTAL operational appropriations || Commitments || (4) || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
 Payments || (5) || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations under HEADING 1A of the multiannual financial framework || Commitments || =4+ 6 || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
 Payments || =5+ 6 || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
Comments:
After the
initial 3 years period (2014-2016), during which EIOPA will have more one-off
tasks, the situation will have to be reassessed in order to set the appropriate
level of human resources actually needed to fulfil the tasks covered by this
Directive and examine possible redeployment.
The operational
appropriations above are related to the specific tasks allocated to EIOPA
according to the proposal:
1)           Tasks
related to establishing, publishing and keeping up to date a single electronic
database
EIOPA should
establish, publish and keep up to date a single electronic database containing
a record of each insurance and reinsurance intermediary which has notified an
intention to exercise its freedom of establishment or to provide services.
Member States shall provide relevant information to EIOPA to enable it to
manage such a register. This register should also show a hyperlink to each
Member State's competent authority. 
2)           Tasks related
to harmonisation and coordination of rules of the IMD 2 by drafting standards
(5 delegated acts and permanent tasks)
EIOPA should work
together to achieve as much consistency as possible in the conduct of business
standards for retail investment products that are subject to either MiFID II
Directive or to IMD2 Directive.
EIOPA will have to
draft five delegated acts regarding 
1)      the content
of adequate professional knowledge and ability of the intermediary; 
2)      conflicts of
interests linked to the sale of insurance investment products, 
3)      general
principles and information to customers in relation to the sale of insurance
investment products;
4)      detailed
suitability and appropriateness test for the sale of insurance investment
products,
5)      how the remuneration-
including contingent commission - is disclosed to the customer.
Permanent task
EIOPA will also have
a number of other permanent tasks, e.g. intervening in case of disagreements
between home and host supervisory authorities, particularly in situations when
an insurance or reinsurance intermediary is not meeting its obligations when
transacting business in the Host Member State.
3)           Tasks
related to consistent application of national regulatory powers by issuing
guidelines and by drafting implementing technical standards (1 implementing
standard, 2 guidelines, permanent tasks)
EIOPA will have to
draft implementing technical standards concerning the procedures and forms for
submitting information in relation to administrative measures and sanctions imposed
by Member States.
EIOPA will also have
to issue guidelines regarding supervision of cross-selling (tying) practices.
It will have to issue guidelines on the types of administrative measures,
sanctions and the level of administrative pecuniary sanctions.
4)           Tasks
related to gathering and publishing information (repository and permanent
tasks)
EIOPA will have to
present a standardised information sheet for general good rules to be completed
by the competent authorities in each Member State. 
It will also have
some permanent tasks: 
EIOPA will have to
collect and publish information about general good rules. It will have to
ensure that information it receives relating to stricter national provisions on
information requirements and conflicts of interests is communicated to
insurance undertakings, intermediaries and consumers. It shall publish
information on sanction in its annual report as well.
5)           Tasks
related to the monitoring and evaluation of the proposal (3 reports)
EIOPA will have to
produce two reports on the application of this Directive (one is after 4 year
of the entry into force, the other one is after 6 years). In these reports,
EIOPA shall undertake an evaluation of the structure of insurance
intermediaries' markets. EIOPA shall examine whether the competent authorities
are sufficiently empowered and have adequate resources to carry out their
tasks. EIOPA will have to examine in a separate report whether the existing
general good rules comply with the aim of the Internal Market.
 Heading of multiannual financial framework: || 5 || " Administrative expenditure " 
EUR million (to 3 decimal places)
   ||   ||   || Year 2014 || Year 2015 || Year 2016 ||   ||   || TOTAL 
 DG:MARKT || 
  Human resources || 0 || 0 || 0 ||   ||   ||   ||   ||   
  Other administrative expenditure || 0 || 0 || 0 ||   ||   ||   ||   ||   
 TOTAL DG MARKT || Appropriations || 0 || 0 || 0 ||   ||   ||   ||   ||   
 TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 0 || 0 || 0 ||   ||   ||   ||   ||   
EUR million (to 3 decimal places)
   ||   ||   || Year 2014[36] || Year 2015 || Year 2016 ||   ||   || TOTAL 
 TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
 Payments || 0,302 || 0,271 || 0,271 ||   ||   ||   ||   || 0,844 
3.2.2.     Estimated
impact on operational appropriations 
–              
¨         The proposal/initiative does not
require the use of operational appropriations 
–              
ý The proposal/initiative requires the use
of operational appropriations, as explained below:
The specific
objectives of the proposal are set out under 1.4.2. They will be reached
through the legislative measures proposed, to be implemented at national level,
and through the involvement of EIOPA. While it is not possible to attribute
concrete numerical outputs to each operational objective, EIOPA's role and its
contribution to the objectives of the proposal are described in detail in
section 3.2.1.
3.2.3.     Estimated
impact on appropriations of an administrative nature
3.2.3.1.  Summary

–              
X          The
proposal/initiative does not require the use of administrative appropriations 
–              
¨         The proposal/initiative requires
the use of administrative appropriations, as explained below:
3.2.3.2.  Estimated
requirements of human resources 
–                        
X       The
proposal/initiative does not require the use of human resources 
–                        
¨      The proposal/initiative requires the
use of human resources, as explained below:
Comment:
No additional human
and administrative resources will be needed in DG MARKT as a result of the
proposal. Resources currently deployed to follow directive 2002/92/EC will
continue to do so.
3.2.4.     Compatibility
with the current multiannual financial framework 
–              
X          Proposal/initiative
is compatible with the proposed MFF 2014-2020 ¨ Proposal/initiative will entail reprogramming of the
relevant heading in the multiannual financial framework.
The proposal provides for extra tasks to
be carried out by EIOPA. This will require additional resources under budget
line 12.0403.01. This is already included in the proposed multiannual financial
framework 2014-2020.
–              
¨         Proposal/initiative requires
application of the flexibility instrument or revision of the multiannual
financial framework[37].
3.2.5.     Third-party
contributions 
–              
¨         The proposal/initiative does not
provide for co-financing by third parties 
–              
ý         The proposal/initiative provides
for the co-financing estimated below:
Appropriations in EUR million (to 3
decimal places)
   || Year 2014 || Year 2015 || Year 2016 ||   ||   || Total 
 Member States via EU national supervisors * || 0,452 || 0,407 || 0,407 ||   ||   ||   ||   || 1,266 
 TOTAL appropriations cofinanced || 0,452 || 0,407 || 0,407 ||   ||   ||   ||   || 1,266 
* Estimation
based on current financing mechanism in EIOPA regulation (Member States 60%,
Community 40%)
3.3.        Estimated
impact on revenue 
–                        
ý      Proposal/initiative has no financial
impact on revenue.
–                        
¨      Proposal/initiative has the
following financial impact:
–              
¨         on own resources 
–              
¨         on miscellaneous revenue 
Annex
to the Legislative Financial Statement for a proposal for Directive of the
European Parliament and of the Council on Insurance Intermediaries and the Sale
of Insurance Products repealing the Directive 2002/92/EC on insurance mediation
(IMD)
The costs related
to tasks to be carried out by EIOPA have been estimated for staff expenditure
(Title 1), in conformity with the cost classification in the EIOPA draft budget
for 2012 submitted to the Commission. The proposal of the Commission includes
provisions for EIOPA to develop and draft 5 delegated acts and 1 implementing
technical standard. In addition, EIOPA will also have to develop 2 guidelines,
mainly to ensure cooperation between authorities and 3 reports to monitor and
evaluate the effectiveness of the Directive, will hold the register of
intermediaries who intend to go cross-border and will have a number of other
permanent tasks. It has been assumed that the Directive will enter into force
in late 2013, and therefore the additional EIOPA resources are required from
2014. Additional staff has been estimated for the technical standards,
guidelines and reports to be produced by EIOPA; and for other permanent tasks.
As regards the nature of positions, the successful and timely delivery of new
technical standards will require, in particular, additional policy, legal and
impact assessment officers.
The following
assumptions were applied to assess the impact on number of FTEs required to
develop delegated acts, technical standards, guidelines and reports:
1.           One policy officer drafts on average 1,5
delegated acts/technical standards a year and the same policy officer can draft
the related guidelines or reports. Their jobs will also include tasks related
to gathering and publishing information and permanents tasks (see above). This
implies that 4 policy officers are needed; 
2.           One impact assessment officer is needed
for the technical standards above;
3.           One legal officer is needed for the
technical standards and a guideline above.
This means an
additional 6 FTEs are needed from 2014.
It was assumed
that this increase in FTEs will be maintained in 2015 and 2016 since the
standards will most likely be finalised only in 2015 and amendments may be
required in 2016.
Other
assumptions:
1.           Based on the distribution of FTEs in 2012
draft budget, the additional 6 FTEs are assumed to be comprised of 4 temporary
agents (74%), 1 seconded national expert (16%) and 1 contractual agent (10%);
2.           Average annual salary costs for different
categories of personnel are based on DG BUDG guidance;
3.           Salary weighting coefficient for Frankfurt
of 0,948;
4.           Training costs assumed at €1,000 per FTE
per year;
5.           Mission costs of €10,000, estimated based
on 2012 draft budget for missions per headcount;
6.           Recruiting-related costs (travel, hotel,
medical examinations, installation and other allowances, removal costs, etc.)
of €12,700, estimated based on 2012 draft budget for recruiting per new
headcount.
The method of
calculating the increase in the required budget for the next three years is
presented in more detail in table below. The calculation reflects the fact that
that the Community budget funds 40% of the costs.
 Cost types || Calculations || Amount (in thousands) 
 2014 || 2015 || 2016 || total 
 Title 1: Staff expenditure: 11 Salaries and allowances - of which temporary agents - of SNEs - of which contract agents 12 Expenditure related to recruitment 13 Mission expenses 15 Training Total title 1 : Staff expenditure Of which Community contribution (40%) Of which Member State contribution (60%) ||     =4*127*0,948 =1*73*0,948 =1*64*0,948 =6*12,7 =6*10 =6*1         ||     482 69 61 76 60 6   754 302   452 ||     482 69 61   60 6   678 271   407 ||     482 69 61   60 6   678 271   407 ||     1446 207 183 76 180 18   2,110 844   1,266 
The following
table presents the proposed establishment plan for the four temporary agent
positions. 
ò new
[1]               JO L 9, p.3.
[2]               Directive 2009/138/EC of 25 November 2009 on the
taking-up and pursuit of the business of insurance and reinsurance (Solvency
II), JO L 335, p.1
[3]               Directive of the European Parliament and of the
Council on markets in financial instruments repealing Directive 2004/39/EC of
the European Parliament and of the Council (Recast); COM(2011) 656 final.
[4]               See the scope in the Impact Assessment on PRIPs: http://ec.europa.eu/internal_market/finservices-retail/docs/investment_products/29042009_impact_assessment_en.pdf
[5]               https://www.ceiops.eu/fileadmin/tx_dam/files/publications/reports/IMD-advice-20101111/20101111-CEIOPS-Advice-on-IMD-Revision.pdf
[6]               The results are published: http://ec.europa.eu/internal_market/consultations/2010/insurance-mediation_en.htm            
[7]               The minutes of the hearing could be found on the
following website: http://ec.europa.eu/internal_market/insurance/docs/mediation/20101210hearing/panel-summary_en.pdf.
[8]               Cost analysis is based on figures given by the PwC
study and revised by Commission Services. The study covered five Member States
(BE, DE, FR, FI, UK). Some participants were unwilling or unable to provide
precise estimation of costs. The Commission Services' assessment of data
suggests some respondents provided figures that appear inflated without clear
explanation or justification. 
[9]               http://ec.europa.eu/internal_market/consultations/docs/2010/prips/costs_benefits_study_en.pdf
[10]             http://ec.europa.eu/consumers/rights/docs/investment_advice_study_en.pdf
[11]             http://ec.europa.eu/consumers/strategy/consumer_behaviour_en.htm
[12]             Protocol Relating to the Cooperation of the
Competent Authorities of the Member States of the European Union in Particular
Concerning the Application of Directive 2002/92/EC of the European Parliament
and of the Council of 9 December 2002 on Insurance Mediation
[13]             OJ L 9, 15.1.2003, p. 3.
[14]             OJ L
26, 31.1.1977, p. 12. Directive as last
amended by the Act of Accession of 1994.
[15]             OJ L 17, 28.1.1992, p. 32.
[16]             OJ C 111. 6.5.2008.. p.1.
[17]             http://ec.europa.eu/internal_market/fin-net/index_en.htm
[18]             OJ L 113, 13.4.1998, p. 31.
[19]             OJ L 138, 13.7.2000, p. 1.
[20]             Directive of the European Parliament and
of the Council on markets in financial instruments repealing Directive
2004/39/EC of the European Parliament and of the Council (Recast); COM(2011)
656 final.
[21]             COM(2010)716.
[22]             OJ L 331, 15.12.2010, p.48.
[23]             OJ L 281, 23.11.1995, p. 31.
[24]             OJ L 8, 12.1.2001, p. 1.
[25]             The IMD review is based on the "Lamfalussy
process" (a four-level regulatory approach recommended by the Committee of
Wise Men on the Regulation of European Securities Markets, chaired by Baron
Alexandre Lamfalussy and adopted by the Stockholm European Council in March
2001 aiming at more effective securities markets regulation) as developed
further by Regulation (EU) No 1034/2010 of the European Parliament and of the
Council, establishing a European Supervisory Authority (European Insurance and
Occupational Pensions Authority): at Level 1, the European Parliament and the
Council adopt a directive in codecision which contains framework principles and
which empowers the Commission acting at Level 2 to adopt delegated acts (Art
290 The Treaty on the Functioning of the European Union C 115/47) or
implementing acts (Art 291 The Treaty on the Functioning of the European Union
C 115/47). In the preparation of the delegated acts the Commission will consult
with experts appointed by Member States. At the request of the Commission,
EIOPA can advise the Commission on the technical details to be included in
level 2 legislation. In addition, Level 1 legislation may empower EIOPA to
develop draft regulatory or implementing technical standards according to Art
10 and 15 of the EIOPA Regulation which may be adopted by the Commission
(subject to a right of objection by Council and Parliament in case of
regulatory technical standards). At Level 3, EIOPA also works on
recommendations, guidelines and compares regulatory practice by way of peer
review to ensure consistent implementation and application of the rules adopted
at Levels 1 and 2. Finally, the Commission checks Member States' compliance
with EU legislation and may take legal action against non-compliant Member
States.
[26]             ABM: Activity-Based Management – ABB:
Activity-Based Budgeting.
[27]             As referred to in Article 49(6)(a) or
(b) of the Financial Regulation.
[28]             The proposal is of unlimited duration
but after the initial 3 years period (during which EIOPA has more one-off
tasks) EIOPA's permanent new tasks should be ensured by means of redeployment. 
[29]             Details of management modes and
references to the Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html
[30]             As referred to in Article 185 of the
Financial Regulation.
[31]             Diff. = Differentiated appropriations /
Non-diff. = Non-Differentiated Appropriations
[32]             EFTA: European Free Trade Association. 
[33]             Candidate countries and, where
applicable, potential candidate countries from the Western Balkans.
[34]             Year N is the year in which
implementation of the proposal/initiative starts.
[35]             Technical and/or administrative
assistance and expenditure in support of the implementation of EU programmes
and/or actions (former "BA" lines), indirect research, direct research.
[36]             Year N is the year in which
implementation of the proposal/initiative starts.
[37]             See points 19 and 24 of the
Interinstitutional Agreement.