The Directive (EU) 2016/97 of 20 January 2016 on insurance distribution (IDD) authorises the European Commission to adopt certain delegated regulations to define more accurately various regulatory requirements of the IDD. Such authorisations apply – generally with respect to all insurance products concerned except for those concerning large risks – to the topic product oversight and governance requirements (Art. 25 IDD) and – solely with respect to insurance-based investment products – to the topics management of conflicts of interest (Art. 27 and Art. 28 IDD), inducements (Art. 29 IDD) and assessment of suitability and appropriateness and reporting to customers (Art. 30 IDD). The EU Parliament and the Council expressed no objections, and the delegated regulations were published in the Official Journal of the European Union on 20 December 2017 (L 341/1, L 341/8).
The IDD and the delegated regulations were originally intended to apply from 23 February 2018, but on 20 December 2017 the European Commission proposed pushing back the application date of the IDD by seven months to 1 October 2018. As a reason for its proposal, the European Commission cited the need to allow more time for insurance companies and insurance distributors to prepare better for the proper and effective implementation of the Directive and to implement the technical and organisational changes necessary to comply with the delegated regulations.
This proposal was adopted by the European Parliament and the Council on 14 March 2018, with retroactive effect as of the initial application date of the IDD and published on 19 March 2018 (L 76/28). Member states are now required to adopt and publish the necessary laws, regulations and administrative provisions implementing the IDD by 1 July 2018 and to apply them by 1 October 2018 at the latest.
In order to align the application of the delegated regulations to the new application date of the IDD, a separate act was published on 6 April 2018 (L 90/59). According to this act, the delegated regulations concerning product oversight and governance (POG) and insurance-based investment products (IBIPs) will apply directly to the area of insurance distribution and therefore to insurance intermediaries (intermediaries) as of 1 October 2018 without any need for national implementing laws.
Based on the delegated regulations concerning POG and IBIPs, CMS has produced briefing notes for and in cooperation with BIPAR – European Federation of Insurance Intermediaries (BIPAR). These notes have been addressed to the member associations of BIPAR and are intended to provide an overview and orientation on how the business organisation of intermediaries might need to be adapted with regard to the new rules.