Insurance Mediation Directive

1
Insurance Mediation Directive

• Anna Kadar
• Insurance and Pensions Unit
• DG Internal Market and Services European
  Commission

2
The Insurance Mediation Directive (IMD1) and its
recast (IMD2)

• IMD1 (2002) removing barriers to free movement
  of insurance agents and brokers, requirements on
  insurance intermediaries selling insurance
  products (who can sell?)
• IMD2 (proposal 2012) extends IMD1 to all
  sellers of insurance products (including
  insurance companies) and extends IMD1 to all
  products (including life insurance with
  investment elements) (what can the intermediary
  sell?).
• Main objective consumer protection

3
IMD and its links to financial services

• MiFID II (Markets in financial instruments
  Directive) regulates the sale of insurance-based
  investment products via an amendment to IMD1
• Definition of insurance PRIPs (Packaged Retail
  Invesment Products)
• Tying and bundling of products (i.e. mortgage and
  payment protection or life insurance) (MCD
  Mortgage Credit Directive)
• Out-of-court settlement of disputes (ADR
  Alternative Dispute Resolution)

4
Consumer protection in IMD

• Authorisation / registration requirements
  (business card)
• Insurance comparison websites included in the
  scope
• Inclusion of ancillary sellers (travel agents,
  car rentals) as well as insurance companies
• Fair, clear and not misleading information
  provision
• Demands and needs of customer
• Professional qualifications requirements
  (professional training to match the insurance
  product)
• Remuneration disclosure requirements (nature,
  source, amount) insurance company employees'
  variable remuneration (bonus)

5
Insurance products with investment elements

• Additional consumer protection requirements for
  insurance-based investment products
• MiFID II rules on investor protection
• Amending IMD1
• Management of conflicts of interests between the
  insurance intermediary/employee and the customer
• Acting in the best interest of the consumer
• Ban on commissions for independent advice (or MS
  option to do so)
• Consumer protection as regards cross-selling
  practices
• Consumer protection as regards out of court
  settlement of disputes

6
Timing of IMD2

• EP plenary vote took place on 25 February 2014
  (not on legislative resolution)
• Incoming Parliament?
• No Council position yet (expected by the summer)
• IMD2 expected to be finalised by end 2014

7

• Thank you for your attention.
• Questions?
• Email anna.kadar_at_ec.europa.eu