On 22 March 2013, the European Parliament published the opinion of its Committee on Legal Affairs (JURI) regarding the proposed ‘Insurance Mediation Direction (recast)’, known as IMD2.

The key things to come out of this opinion are as follows:

  • The scope of IMD2 should be narrowed: The inclusion of the activities of professional management of claims and loss adjusting in the scope of IMD2 is not justified. The inclusion of these activities does not relate to the sale of insurance products and, therefore, cannot be considered insurance mediation activities. An important factor in the removal of these activities from the scope of IMD2 is that they are already sufficiently covered by national legislation.
  • Certain exceptions should remain: The exception for complementary insurances covering damage to, or loss of, baggage and other risks linked to travel booked with that provider should remain. It is believed that these insurances are usually simple products with low premium and short duration and, as a result, it is not necessary to include them within the scope of IMD2.
  • The definition of “contingent commission” is widened: JURI has expressed that commissions are not only generated by achieving targets related to business placed, but also by the number of claims from clients of the intermediary. Consequently, the definition of “contingent commission” should include all elements influencing this remuneration.
  • The hurdle of demonstrating “appropriate professional experience” is removed: JURI states that the requirement for intermediaries and members of staff of insurance undertakings to demonstrate “appropriate professional experience” should be removed on the basis that it would make access to the profession of insurance intermediaries practically impossible. However, JURI did highlight the importance of insurers possessing the appropriate knowledge and ability to complete their tasks adequately.
  • The requirements for a detailed remuneration disclosures are deleted: JURI states that excessively detailed disclosures can be confusing for consumers and as such does not contribute to comer protection. Therefore, the disclosures requirements regarding the amount of the remuneration, and the nature and basis of the calculation of any variable remuneration, should be removed.