On 16 September 2011, the European Banking Federation (“EBF”), the European Mortgage Federation (“EMF”) and the European Federation of Finance House Associations (“Eurofinas”) published a joint letter (the “Letter”) sent to the European Commission (the “Commission”) that sets out their common views on the Commission’s review of the Insurance Mediation Directive (“IMD”). The Letter can be viewed here. A draft text of the Commission’s review is expected to be published in February 2012.
The first concern expressed in the Letter is that the review should seek to remove inconsistencies that have emerged across the national markets as a result of the IMD requiring only minimum harmonisation. EBF, EMF and Eurofinas believe that full, targeted harmonisation is required to ensure a level-playing field for intermediaries and a consistent level of protection for customers across the EU.
EBF, EMF and Eurofinas also expressed the opinion that, if the new directive is to cover packaged retail investment products, these should be dealt with under a separate regime to other insurance products as they are so different in nature. Furthermore, they felt that existing product exemptions should be retained and that business-to-business contracts should be removed from the scope of the IMD.
In addition, while stating that they see no need for extra formal professional requirements for insurance intermediaries as the existing legislation already sets high professional competence standards, EBF, EMF and Eurofinas emphasised that professional requirements should be proportionate to intermediaries’ level of responsibility and to the risk level of the products in question so as not to discourage them from doing business.
It was also felt that, if the Commission decides to introduce a European standard for information on the roles and activities of intermediaries (referred to as the “European Business Card”), it should be properly tested to assess its practicality before being pursued further.
Finally, EBF, EMF and Eurofinas expressed clear reservations about any measure that would discourage or restrict the provision of loan insurances, as they have concerns about the effect this might have on the loan market and about the impact on the credit rating of lending institutions.