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Distribution of insurance products and after-sale activities

Insurance intermediaries are key actors in the process of selling insurance products in the EU.

They help insurers by:

  • facilitating entry into the market, helping new insurers reach a wide client base without having to incur the costs of building a distribution network.
  • assisting with claims-related services and policy administration.

They also help insurance customers by:

  • identifying the risks customers face
  • ensuring that customers take informed decisions about the risks they wish to insure
  • designing new and innovative solutions
  • reducing customers’ search costs
  • providing personalised advice
  • assisting customers with claims-related services and policy administration.

Insurance products are also sold directly by some insurance companies and bank-assurance.

Some sellers of insurance products, such as car rentals and travel agents, exercise this business activity on ancillary basis.

After-sale activities include claims handling and loss adjustments.

EU Directive on insurance mediation

EU policy is aimed at achieving a market throughout the EU for insurance intermediaries.

The current EU Directive 2002/92 on insurance mediation aims to ensure:

  • professionalism and competence among insurance intermediaries
  • protection of customers’ interests
  • that individuals / companies providing insurance or reinsurance mediation are registered in their home EU country (which allows them to do business elsewhere in the EU)
  • Respect for minimum professional requirements such as:
    • appropriate knowledge and ability
    • good repute
    • professional indemnity insurance or other comparable guarantee
    • sufficient financial capacity to protect customers.
  • clear explanations for customers on the advice given
  • involvement of national financial authorities and other bodies in the registration process
  • easy public access to details of registered insurance and reinsurance intermediaries
  • appropriate and effective alternative dispute resolution procedures, in particular via the FIN-NET network.

Related documents

Revision of the Directive

The Directive is applied differently between EU countries, meaning that:

  • EU insurance markets are fragmented
  • there are significant inconsistencies, in particular regarding the information requirements imposed on sellers of insurance products
  • customers are more likely to misunderstand the risks, costs and features of insurance products.

The collapse in consumer confidence during the financial crisis has also given new prominence to consumer protection issues.

On 3 July 2012 the Commission adopted a proposal for a revision of the Insurance Mediation Directive (IMD 2). The goal of the Commission’s proposal is to upgrade consumer protection in the insurance sector by creating common standards across insurance sales and ensuring proper advice

Related documents

Request for advicepdf(431 KB) Choose translations of the previous link  on solving these issues (sent early 2010 to the Committee of European Insurance and Occupational Pensions Supervisors – CEIOPSOpens a new window).

Public consultation (autumn 2010) to collect views from all stakeholders on how to address the main weaknesses in the current Directive.