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Insurers welcome calls to delay introduction of Insurance Distribution Directive

19 Oct 2017, 12:37 pm

Trade bodies for UK and EU insurers have welcomed calls by a European parliamentary committee to delay the introduction of the Insurance Distribution Directive (IDD) until October 2018, almost eight months later than planned.

The economic and financial affairs committee (ECON) of the European parliament has recommended that the European Commission postpone the date from which the new regime should apply to EU insurance intermediaries until 1 October 2018. Member states would still be required to transpose the IDD into national legislation by 23 February 2018.

The amendment has been championed by smaller EU insurance markets, in particular Malta.

Michaela Koller, director general of trade body Insurance Europe, welcomed ECON's intervention.

"Insurers need to be given sufficient time to implement the IDD and they can only do so with legal certainty once the final rules are known," she said.

"Insurance distribution processes will be heavily impacted by the new conduct of business requirements in the IDD. For the benefit of consumers, insurers need an appropriate amount of time to properly implement these requirements. Therefore, Insurance Europe calls on all of the European institutions to recognise the importance of delaying the application of the IDD and to take appropriate action," she said.

Hugh Savill of the Association of British Insurers (ABI) also welcomed ECON's recommendation. The UK's Financial Conduct Authority (FCA) is currently seeking feedback on its third IDD-related consultation paper, which it published in September.

Once in force, the IDD will revise and update the EU's framework for regulating insurance brokers, agents and other intermediaries, which is currently contained in the 2002 Insurance Mediation Directive. The UK intends to implement the IDD despite its impending exit from the EU, although the new regime will have less impact on UK firms because it replicates many provisions that are already in force in the UK.