The European Insurance and Occupational Pensions Authority (EIOPA) has published a Consultation Paper on the proposed format of the non-life Insurance Product Information Document (IPID) required by the Insurance Distribution Directive (IDD). EIOPA has discussed the proposed IPID with the regulators of the European Union’s Member States; and it’s been the subject of 2 phases of consumer testing in each of Germany, Spain, Romania and the United Kingdom.
The consultation period closes at 6pm on 24 October 2016.
EIOPA is required to finalise its IPID proposals and submit them to the European Commission by 23 February 2017, for possible adoption after that.
Article 20 of the IDD provides that:
“… prior to the conclusion of [an insurance] contract, whether or not advice is given and irrespective of whether the insurance product is part of a package … the insurance distributor shall provide the customer with [objective] information about the insurance product in a comprehensible form to allow the customer to make an informed decision … [These details shall be modulated according to] the complexity of the insurance product and the type of customer.
In relation to the distribution of non-life insurance products … the information … shall be provided by way of a standardized insurance product information document on paper or on another durable medium.
The insurance product information documents … shall be drawn up by the manufacturer of the non-life insurance product” and meet the requirements of articles 20(7) and (8) of the IDD.
These requirements will be familiar to FCA-authorised insurers and insurance distributors (at least). It’s really the IPID that’s new.
EIOPA’s proposed IPID is on page 24/37 of the Consultation Paper, where it appears as an Annex to the draft Commission Implementing Regulation that will be used to create it and (heavily) prescribe its contents. The earlier part of EIOPA’s Consultation Paper explains how and why it’s proposing an IPID in this particular form.
EIOPA will consider the responses it receives to its Consultation Paper, before finalising its proposals and submitting them to the Commission by 23 February 2017. The Commission will have 3 months to decide whether to endorse EIOPA’s proposals, from the date it receives them – although the Commission can extend this by a month, if it wishes to do so. If the Commission endorses and adopts EIOPA’s proposals, they will be published in the Official Journal of the EU and come into force on the 20th day after publication. The IPID should therefore be in its final form by Q3 2017, up to 9 months before insurers and insurance distributors are required to comply with the IPID Regulation, and the European Union Member States’ IDD implementing rules. We’ll see.