As a first step in the European Commission's delayed review of the Insurance Mediation Directive (the Directive) the Commission has written to the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) requesting technical advice on revisions to the Directive to improve its functioning.
The aim of the review is to remove obstacles to the functioning of the single market for insurance and reinsurance intermediaries by removing member states' "gold plating" of implementation requirements and the different national requirements applied under "general good" provisions.
The Commission has asked CEIOPS for technical advice on the following issues:
- Legal framework. Whether the IMD should be a Lamfalussy directive (following the four stage Lamfalussy process of implementation).
- Scope. Whether a distinction should be drawn between investments packaged as life insurance policies and other general insurance products and how a level playing field should be created for all parties involved in the sale of insurance products.
- Third country insurance intermediaries. The Commission wishes to improve legal certainty relating to services provided by insurance intermediaries established outside the EEA.
- Professional requirements. The Commission is considering harmonising requirements across the EU on the knowledge and ability of individuals selling insurance including professional qualifications.
- Cross-border issues. The Commission wishes to improve the current notification system applicable to the sale of insurance on a cross border basis including the imposition by host states of "general good" requirements and to integrate certain provisions of the Luxembourg Protocol relating to the cooperation of national supervisors into the revised Directive.
- Conflicts of interest and transparency. For insurance policies that are not packaged retail investment products, the Commission intends to introduce greater transparency on the remuneration of intermediaries and mechanisms to ensure management of conflicts of interest. As a consequence mandatory Commission disclosure may replace the existing FSA requirement for disclosure if requested by a commercial customer and the UK voluntary industry guidelines (which have been confirmed by the FSA).
- Administrative burden. The Commission wishes to identify ways to reduce the administrative burden of implementing the IMD and conduct a cost benefit analysis of the regime.
CEIOPS is due to provide its initial advice to the Commission by the summer of 2010. For full details of the request click here.