The European Insurance & Occupational Pensions Authority (EIOPA) has published its “Final Report … on Preparatory Guidelines on Product Oversight and Governance arrangements by insurance undertakings and insurance distributors“. These Guidelines are intended to help insurance manufacturers and distributors prepare for compliance with the product oversight and governance requirements in the Insurance Distribution Directive (IDD). The IDD came into force on 22 February 2016; and it must be transposed into national law by 23 February 2018.
The IDD will, and the Preparatory Guidelines do, require firms to: (a) identify the target market for every product; (b) align every product with the interests of that market; and (c) use appropriate distribution channels to get every product to its target market.
Insurance manufacturers will also be required to test their products, and take appropriate action to mitigate any unforeseen risks that arise over the life of their products.
Insurance distributors will be required to (a) obtain the insurer’s relevant target market information (if it’s not automatically provided to them); (b) make sure they properly understand what they’ve been given; and (c) make sure they do not act in a way that’s inconsistent with the manufacturer’s specified distribution strategy and target market information.
There’s more information about the IDD in:
- our article “Europe: The Insurance Distribution Directive: Looking under the bonnet” (published by Insurance Post on 7 April 2016, and available here); and
- our blog post about the IDD’s particular requirements for investment insurance policy manufacturers and distributors (available here).
We are running free 45 minute workshops for life and non-life insurance manufacturers and distributors at the moment. If you would like to arrange one for your business, get in touch: firstname.lastname@example.org / +44 207 556 4626