On May 13, a compromise text for a revised insurance mediation directive (IMD2) was published. Broadly the text revises the existing insurance mediation directive in order to reflect concepts and definitions found in both Solvency II and the revised Markets in Financial Instruments Directive (MiFID II). The Presidency compromise text also amends the original Commission proposal with the effect that:
- Claims managers and loss adjusters are excluded from scope.
- Insurance-based investment products are subject to an enhanced conflicts of interest and customer information regime for “insurance distribution” activities.
- Ancillary providers will be subject to a notification regime.
- Professional requirements are revised.
- Tying and bundling are allowed but intermediaries must explain whether each component may be purchased separately.
- The nature of remuneration must be disclosed and whether that remuneration is based on commission or fees etc, but the amount need not be disclosed.
- In accordance with MiFID II execution only services are limited to non-complex products.
Trialogue negotiations between the Council, the European Parliament and the Commission are expected to resume later in the year. If a draft text can be agreed, there is still a chance that the Directive will be adopted at first reading in the European Parliament plenary session, the date of which is yet to be announced.
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