The following Insurance & Reinsurance Q&A produced in partnership with Julia Dias QC of 7KBW provides comprehensive and up to date legal information covering:
This Q&A addresses how insurance intermediaries should handle conflicts of interest following implementation of Directive (EU) 2016/97, the Insurance Distribution Directive (IDD).
The IDD applies from 1 October 2018. It is not directly applicable and is implemented by the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Order 2018, SI 2018/546. Its primary aim is to enhance consumer protection when buying insurance, including general insurance, life insurance and insurance-based investment products (IBIPs). It thus applies to insurance intermediaries who distribute any type of insurance product. Nonetheless, the IDD imposes more prescriptive obligations specifically on IBIP distribution so as to align customer protection in this area more closely with MiFID II; see, in particular, Delegated Regulation (EU) 2017/2359 which is directly applicable.
It is important to note that the UK has taken full advantage of the latitude accorded member states to adopt stricter provisions than the IDD by amending the Financial Conduct Authority (FCA) Handbook to:
apply IDD standards to a wider range of entities than required
maintain existing standards where these exceed the IDD
introduce standards above IDD requirements to align with MiFID II
English lawyers should therefore refer to relevant UK legislation and the FCA Handbook and not simply to the EU texts. See further below.
All distributors, Article 17.1 of Directive (EU) 2016/97, IDD,
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