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

The following Insurance & Reinsurance practice 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
  • Level 2 and level 3 measures
  • UK implementation
  • Impact of Brexit on distribution of insurance based investment products
  • Professional requirements
  • Knowledge and ability requirements
  • Who is within scope?
  • Training and development
  • Good repute
  • More...

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

IDD organisational and conduct of business requirements—overview

The Directive (EU) 2016/97, Insurance Distribution Directive (IDD) replaced the Directive 2002/92/EC, Insurance Mediation Directive (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

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