An integral part of regulatory changes impacting the financial services industry (e.g. PRIIPs, MiFID), the IDD will require all actors involved in the manufacturing and /or distribution of insurance products to review their business strategy, adapt their organisation, as well as rethink their future interactions.
It is important to bear in mind the minimum harmonisation character of the IDD, which will allow Member States to introduce more restrictive provisions. Manufacturers and distributors involved in cross-border activities, will not only need to ensure local compliance but also in all distribution's markets.
With the recent proposal to delay the application date of the IDD to 1 October 2018, one thing remains certain: there is less than a year to get ready and ensure compliance!
PwC can assist you at every step of your Insurance Distribution Project, and will gather the right experts for every aspect of your project, including from its extensive IDD international network.
Our flexible and modular approach will ensure you a tailored-made, efficient and cost-controlled delivery, according to your constraints, specificities and timeline.
The IDD establishes new rules on insurance distribution and seeks to:
IDD Key items
will need to be ensured by all intermediaries and manufacturers’ employees involved in distribution, proportionally to the complexity of the products sold, as well as the distribution nature.
requires insurers to set up and operate internal processes to make sure the products’ design, marketing and distribution strategy are adequately controlled and monitored before and after launch.
will now be subject to higher standards, (minimum measures to identify, prevent, manage and disclose these conflicts).
as well as cross-border activity provisions are included within IDD. All intermediaries have to register in the national register of their home country.
requirements are clearly set in the IDD, which foresees a mandatory professional civil liability insurance for all intermediaries.
IDD, as a minimum harmonisation Directive, does not de facto prevent inducements. However, assessment of potential detrimental effect of inducements schemes needs to be undertaken and documented.
will impose bundled products sellers to inform customers on the characteristics of each product's components (including costs and charges), and the possibility to buy each component separately.
have their roots in the principle that distributors must always "act honestly, fairly and professionally in accordance with the best interest of their customers". In this context, the assessment of appropriateness and suitability of the advice (when provided) has to be addressed cautiously.
Shall contain standard information on general/non-life products, provided to clients in the pre-contractual stage. The IPID has to be short, stand-alone, comprehensible, accurate and not misleading.
The whole organisation is impacted
Challenges are everywhere!
Market impacts (cross-border activities)
On 14 February 2018, EU ambassadors confirmed, on behalf of the Council, an agreement to delay the transposition deadline and application of new rules on insurance distribution. Read more
On 20 December 2017, European Commission has issued a legislative proposal to postpone the application date of the IDD, as well as the two Delegated Regulations to 1 October 2018. This will be enacted through an accelerated legislative procedure ("quick fix package").
EIOPA Technical advices overview
Insurance Leader, PwC Luxembourg
Tel: +352 49 48 48 2071
Partner, Insurance, assurance and regulatory services, PwC Luxembourg
Tel: +352 49 48 48 2114
Insurance Partner, PwC Luxembourg
Tel: +352 49 48 48 2380