Coreper has approved the trilogue agreement on the proposed Insurance Distribution Directive (the IDD), on behalf of the European Council.
The IDD is expected to be “minimum harmonising”, so the European Member States will be entitled to require more of the insurance distributors registered in their respective jurisdictions than the IDD itself will require.
The IDD is intended to:
- apply to all insurance distribution channels, including the sale of insurance policies on an ancillary basis;
- better ensure the identification, mitigation and management of conflicts of interest;
- enhance the suitability and objectiveness of insurance advice;
- ensure that sellers’ professional qualifications match the complexity of the products they sell;
- clarify the procedure for cross-border market entry; and
- ensure greater consistency between financial sectors, (for example) by taking into account the rules that apply to the markets in financial instruments.
The directive will now be submitted to the European Parliament for a vote at first reading, and to the Council for final adoption. Member states will have two years to transpose the directive into national law, and insurance distributors will be expected to comply with the new rules after that.
The final text of the IDD was only published a few days ago. Our blog about that is here.