05/04/18
The Insurance Distribution Directive (IDD) should replace the Insurance Mediation Directive (IMD) by 1 October 2018.
The IDD is a new EU wide directive aimed at ensuring minimum harmonisation of insurance distribution regulation across the EU, creating a ‘level playing field’ for insurance intermediaries and insurance distribution, regardless of the channel customers use to purchase their products. The aim is to ensure consistent prudential standards for intermediaries as well as significantly raising conduct standards, improving consumer protection and effective competition.
The IDD applies to insurers, insurance intermediaries, price comparison websites/aggregators and ancillary insurance intermediaries. The conduct requirements applying to distributors (which includes insurers) vary according to the nature of the business, customers (including commercial clients) and distribution channel used.
With IDD being minimum harmonisation, each EU Member State is able to top up the regulation, and as a result it will have its own version of the IDD.
At this stage, firms should be at an advanced stage of considering their readiness for the IDD.
The next six months will be crucial in terms of testing and remediating any IDD implementation measures. This will ensure that systems and processes are as robust as possible on the go-live date.
PwC is able to offer a multi-disciplinary team that draws on subject matter experts with experience of advising insurance clients. We are able to assist with many aspects pertaining to IDD implementation including the provision of an IDD Health Check. A health check is a cost effective way of obtaining assurance that your organisation is ready to comply with the salient aspects of the IDD as from the first day of it’s implementation.