The European Parliament’s Economic and Monetary Affairs Committee has recommended that the application date for the Insurance Distribution Directive (IDD) be delayed until 1 October 2018. If this recommendation is adopted by the European Commission, each EU member state would still be required to transpose the IDD into its national legislation by 23 February 2018, but insurance intermediaries would not be required to comply with the new legislation until 1 October 2018.
The ECON’s recommendation has been made to enable the insurance industry to have sufficient time to implement the technical and organisational changes which would be necessary to comply with the new legislation and regulatory requirements, some of which have yet to be finalised, both at a European level and at member state level. At the time of publication, Commission Delegated Regulations which were adopted in September had not formally entered into force and, as reported in our bulletin of 16 October1, the FCA’s most recent consultation paper on the IDD was published only in September and remains open until the end of November, with the final policy statement not expected until January 2018.
It is therefore not surprising that ECON’s recommendation has been welcomed by the industry, with the ABI’s director of regulation commenting that “it is important to grant insurers the sufficient time to properly implement the complex requirements”. The director general of Insurance Europe agreed, stating that “Insurers need to be given sufficient time to implement the IDD and they can only do so with legal certainty, once the final rules are known.”
ECON’s recommendation has been adopted by the European Parliament in plenary, but still needs to be adopted by the European Commission. It seems a sensible recommendation and is one which the industry is hoping will be taken on board.