New Rules For Insurance Distribution

New rules for insurance distribution in the EU

In February 2016, the Directive (EU) 2016/97 of the European Parliament and of the Council (Insurance Distribution Directive, "IDD") entered into force, replacing the previous Directive 2002/92/EC on insurance mediation ("IMD"). The new rules will have to be implemented into national law by the EU member states by February 2018.

The IDD regulates the distribution of insurance both indirectly by intermediaries and directly by insurance undertakings. The directive stipulates the general principle of honesty, fairness and professionality in the customer's best interest, and derives various duties therefrom.

A key aspect of the new IDD are the increased duties attached to the distribution of insurance-based investment products (among others: unit-linked life insurance policies). The focus lies on the avoidance of conflicts of interest, hence the introduction of enhanced remuneration requirements, increased information