Europe has published its response to a questionnaire by EIOPA (European Insurance and Occupational Pensions Authority) on the application of the Insurance Distribution Directive (IDD).

Since the IDD entered into force in October 2018, the overall impact of the Directive has been positive for two main reasons.

Firstly, the IDD has worked within existing distribution systems and has effectively raised the professionalism of insurance distribution, while providing for additional transparency, both of which have a positive impact on consumers.

Secondly, the IDD respected national differences in market structure and consumer culture, which allows national regulators and supervisors to take an approach to insurance distribution that is appropriate for their market.

Any future changes to modernize the IDD should therefore maintain this approach to work within existing systems and to reflect national differences. While the IDD is working well overall, improvements should be made through the review of the Directive to:

• Address flawed rules that result in consumers being overloaded with information.
• Create a legislative framework that is fit for the digital age and that allows consumers to benefit from increasing online sales.

In order to get a better picture of the impact of the IDD and to isolate the impact of the new Directive from other market trends (and the general market disruption seen in 2020), it will be necessary to revisit the evaluation of the application of current rules at a later date, and before any amendments to the current rules are considered.

Source: Insurance Europe