Insurance Distribution Directive (IDD)
The IDD came into force on 22 February 2016 and updates the 2002 Insurance Mediation Directive (IMO). IMO had set out a framework for regulating the EU insurance intermediaries with minimum requirements around registration, knowledge and consumer information. The key elements of the updated directive are (i) extending the scope to all distribution channels, (ii) identifying, managing and mitigating conflicts of interest including remuneration basis, (iii) strengthening administrative sanctions, (iv) enhancing the suitability of insurance advice, (v) ensuring that qualifications match the complexity of the products sold and (vi) simplifying cross-border entry procedures. Member states had untill 22 February 2018 to transpose the IDD into national laws.
1Implementation / enforcement 03/2011 - 07/2012
2Discussion / consultation 07/2012 - 02/2016
3Implementation / enforcement 02/2016 - 02/2018
4In effect 02/2018 -
Inconsistent application of IMO at the national level led to the formulation of IDD. The biggest impact of IDD would therefore be on parties operating in member states that implemented the bare minimum IMD requirements and on undertakings selling directly to customers and not registered as intermediary. However, all insurance undertakings currently meeting the local applications of IMO need to review and update their conflicts of interest, remuneration and information disclosures, governance and product approval process, knowledge management process, process to advise products and document the advice provided. Firms are recommended to monitor the implementation of IDD in member states they operate in, to ensure compliance with local insurance regulation.
European Commission: Distribution of insurance products and after-sale activities