Lord Hill, Commissioner for the Directorate-General for Financial Stability, Financial Services and Capital Markets Union, recently delivered a speech about insurance distribution in the single market.
Lord Hill recognised the importance of the insurance market in creating “…one of the foundations of the whole European economy”, and praised the positive negotiations between the European Parliament, the Council of the EU and the Commission. Lord Hill believes that the recast Insurance Mediation Directive (known as IMD2) will strengthen the single market in insurance and was confident that the trialogue negotiations would be finalised during the first half of 2015 in light of the recent developments in negotiations.
Lord Hill identified some areas in which he felt there could be further development, including:
- Although the recent PRIIPS (packaged retail and insurance-based investment products) Regulation (Regulation 1286/2014) introduced a common standard of transparency, there is still a lack of transparency and comparability of other insurance products, such as home, motor and life policies, for consumers.
- Where consumers are unable to make use of insurance products which they have been paying for in their home Member State in another Member State due to certain geographical limitations relating to coverage, validity and availability.
- The current fragmentation of the consumer insurance market and the limited cross-border access to insurance products in light of the fact that consumers are only able to buy insurance products in their home Member State even though products offered in another Member State may be cheaper and better suited to them.
Notwithstanding these issues, Lord Hill recognised that the insurance industry plays a vital role in Europe, and employs two million people, but recognised that the insurance market is facing significant changes which will require it to continue to evolve.
A copy of the speech as delivered, can be found here: http://europa.eu/rapid/press-release_SPEECH-15-3981_en.htm