Current rules on insurance distribution
Insurance distribution means to sell, propose to sell, advise on or carry out other work to prepare an insurance contract. It includes dealing with claims after an insurance event.
The sale of insurance products in the EU is regulated by the insurance mediation directive (IMD). The IMD only applies to brokers and other insurance intermediaries. It obliges them to register in their home country and meet certain minimum requirements.
New legal framework
In 2016 the European Commission adopted new rules to widen the IMD's scope to all sellers of insurance products, including insurance companies that sell directly to consumers.
Under the new framework, known as the insurance distribution directive (IDD), consumers and retail investors buying insurance products will benefit from
- greater transparency in the price and costs of insurance products
- a simple, standardised insurance product information document (IPID) providing clearer information on non-life insurance products, so that consumers can make more informed decisions
- where insurance products are offered in a package with another product or service, for example when a new car is sold together with motor insurance, consumers will have the choice to buy the main product or service without the insurance policy
- rules on transparency and business conduct to help consumers avoid buying products that do not meet their needs
The IDD should apply from 23 February 2018. However, the European Union has agreed to postpone the application date by 7 months to 1 October 2018.