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Distribution of insurance products and after-sale activities

Insurance products can be sold by different kinds of insurance distributors: insurance companies, agents, brokers, banks or ‘bancassurance companies', and even travel agents, car rental companies or shops selling consumer goods. In all cases the consumer will expect to obtain from the insurance distributor fair and clear information about the relevant insurance product. The new EU legal framework for insurance distribution is the Insurance Distribution Directive, which replaces the Insurance Mediation Directive.

New legal framework: Insurance Distribution Directive

The Insurance Distribution Directive or IDD (Directive 2016/97/EU) regulates the activities of all distributors of insurance products: intermediaries, insurance companies, their employees, bank-assurance, ancillary insurance intermediaries (e.g. travel agents or car rental companies), including online distribution. The Directive determines the information that should be given to consumers before they sign an insurance contract, imposes certain conduct of business and transparency rules for distributors, clarifies the rules for cross-border business and addresses the supervision and sanctioning of insurance distributors if they breach the provisions of the Directive. It also includes additional requirements for the sale of insurance products with investment elements to ensure that insurance policyholders get a similar level of protection as buyers of other investment products regulated under MiFID II.

The IDD was adopted on 20 January 2016. Member States will need to transpose it into national legislation by 23 February 2018. The new rules will apply to all insurance and reinsurance distributors covered by the Directive as from that date.

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Implementing rules

Delegated acts

The Directive empowers the Commission to adopt delegated acts with respect to: (1) conflicts of interests, (2) inducements, (3) product oversight and governance and (3) suitability and appropriateness. The Commission will adopt the delegated acts after receiving EIOPA advice, which is due by 1 February 2017.

Implementing technical standards

The Directive provides for the adoption by the Commission of implementing technical standards regarding a standardised Insurance Product Information Document (IPID) for non-life insurance products. EIOPA is to submit a draft by 23 February 2017.

Regulatory technical standards

The Directive empowers the Commission to adopt regulatory technical standards on the adaptation of the required amounts of professional indemnity insurance for insurance distributors. EIOPA is to submit a draft by 30 June 2018.

Current legal framework: Insurance Mediation Directive (IMD)

Until 23 February 2018, the Insurance Mediation Directive of 2002 (Directive 2002/92/EC) remains the applicable EU legal framework for insurance distribution. It only applies to insurance sales via intermediaries, not to insurance products sold directly by insurance companies.

Related documents


Insurance Distribution Directive

Insurance Mediation Directive