Login Request a trial Domestic Legislation EU Legislation Organisations Commentaries Topics What's new More Topic: Insurance Distribution Summary On 2 February 2016, the Insurance Distribution Directive (IDD) was published in the Official Journal of the EU. The Directive entered into force on 22 February 2016. The requirements set out in the Directive applied to firms from 1 October 2018. The IDD aims to improve the regulation of retail insurance sales and distribution practices across the single European market and aims to bring greater transparency and improved, more comprehensible, information to consumers, to help people ensure that they buy products that suit their needs. It will continue to be a minimum harmonisation Directive, meaning that Member States may gold-plate it (impose higher standards/requirements) if they wish. To enhance cross-sectoral consistency, certain parts of the IDD are aligned with the rules under the MiFID II Directive. Key changes to IMD regime - Scope: The IDD extends the scope of the IMD to all sales of insurance products, covering all participants in the sale of insurance products. The IDD will apply to not only (re)insurance intermediaries but also to distributors of insurance products that sell directly to customers without the use of an intermediary i.e. insurers and reinsurers Insurance undertakings which sell insurance products directly are brought within the scope of this Directive. In order to guarantee that the same level of protection applies regardless of the channel through which customers buy an insurance product, the IDD also covers other market participants who sell insurance products on an ancillary basis, such as travel agents and car rental companies, unless they meet the conditions for exemption. - Minimum professional knowledge and competence requirements: Individual managers and employees possess an appropriate level of knowledge and competence appropriate to product complexity and nature of activities conducted (includes minimum 15 hours CPD requirement). The IDD introduces provisions that recognise the importance of guaranteeing a high level of professionalism and competence among firms involved in insurance distribution and their employees. - Passporting: The IDD provides greater detail and clarity on the procedure for cross-border entry by intermediaries into insurance markets across the EU. EIOPA is to establish a single electronic public register containing records of all intermediaries that have notified their intent to carry on cross-border business. - Enhanced information and conduct of business requirements: Firms must establish organisational arrangements to prevent conflicts of interests, and inform clients if those arrangements are insufficient to prevent a conflict with regard to a particular contract. The IDD significantly amends the IMD information and conduct of business requirements, taking the MiFID II Directive into account to ensure cross-sector consistency. - Insurance-based investment products. In addition to the conduct of business standards defined for all insurance products, insurance-based investment products are subject to specific standards aimed at addressing the investment element embedded in those products. Such specific standards must include provision of appropriate information, requirements for advice to be suitable and restrictions on remuneration. Background Log in Username * Password * Log in Remember me Request a trial The best way to experience Better Regulation is to try it - free and without obligation. Take a trial Go to Latest EU Exit Key documents Regulatory Calendar Consultations Consultations Open Consultations Closed Commentaries Summary Email updates Tick to sign up for email notifications when this topic is updated. Insurance Distribution Directive - IDD Contact us Terms & Conditions Privacy Policy Better Regulation Ltd. 23 Berkeley Square London, W1J 6HE info@betterregulation.com +44 (0)20 7665 6639 BetterRegulation.com © 2021 All rights reserved.