Insurance Distribution Directive (IDD)—organisational and conduct of business requirements
Insurance Distribution Directive (IDD)—organisational and conduct of business requirements

The following Insurance & Reinsurance guidance note provides comprehensive and up to date legal information covering:

  • Insurance Distribution Directive (IDD)—organisational and conduct of business requirements
  • IDD organisational and conduct of business requirements—overview
  • Professional requirements
  • Professional indemnity insurance
  • Client money
  • Complaints handling and out-of-court redress
  • Conduct of business: general principles
  • Information requirements
  • Demands and needs
  • Product information
  • more

BREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance, see Practice Note: Preparing for Brexit: Insurance distribution—quick guide.

IDD organisational and conduct of business requirements—overview

The Insurance Distribution Directive (Directive (EU) 2016/97) (IDD) replaced the Insurance Mediation Directive (2002/92/EC) (IMD) effective 1 October 2018. Whereas the IMD only applied to 'intermediaries', the IDD affects all market participants who distribute insurance products, thus bringing insurers and reinsurers directly within its scope. Among other things, the IDD sets out expanded organisational and conduct of business requirements for insurance and reinsurance distributors, which includes insurance and reinsurance intermediaries, ancillary insurance intermediaries, insurers and reinsurers.

This Practice Note provides an overview of the organisational and conduct of business requirements of the IDD, including how those requirements have changed from the IMD, how they have been supplemented by level 2 rules and level 3 guidance, and how they have been implemented in the UK. The requirements include:

  1. professional requirements to ensure that individuals involved in selling insurance products to consumers are competent to do so, including requirements related to knowledge and ability, training and development, good repute and record-keeping

  2. requirements for insurance and reinsurance intermediaries to hold professional indemnity insurance

  3. client money provisions

  4. procedures for complaints handling and out-of-court redress

  5. general conduct of business principles

  6. requirements to provide information to customers, including with regard to:

    1. general information about insurance intermediaries and insurers

    2. scope of service

    3. remuneration

    4. demands and needs

    5. product information

    6. the means of providing that information, and

    7. an exemption from the information requirements