At the same time, Juan-Ramon PLA mentioned in his presentation that the IDD empowers the Commission to adopt 4 binding Delegated Acts (DAs) to specify its provisions re. Product Oversight and Governance (POG), Conflicts of interest, Inducements and Assessment of suitability and appropriateness and reporting. The IDD empowers the Commission to adopt one implementing technical standard (ITS) regarding a standardised format of the Product Information Document (PID). The IDD empowers the Commission to adopt regulatory technical standards (RTS) reviewing the minimum amounts of PII / financial capacity. EIOPA has to develop the draft DAs, ITS and RTS.
At the same time, "the IDD empowers EIOPA to adopt various level 3 measures and to carry out reports and studies".
According to the presentation, from a BIPAR perspective, the main characteristics of IDD are as follows:
- The IDD's much wider scope (than the IMD one) ensures a level playing field and adequate consumer protection. However, from a consumer protection perspective, exemptions from the IDD scope could have been further limited.
- The IDD places POG requirements mostly on "insurance undertakings, as well as intermediaries which manufacture any insurance product" -and not on intermediaries that do not manufacture products. As stated in Recital 72 of the IDD, it is crucial that the proportionality principle applies to Delegated Acts' requirements imposed on insurance distributors and to the exercise of supervisory powers.
- The IDD allows all consumers to receive relevant, clear and meaningful information, so that they can take an informed decision about their insurance products. For non-life insurance and for pure risk life insurance, any additional disclosures at national levels would result in distortion and weakening of competition of which ultimately consumers will be the victim. It would also lead to a distraction of consumers away from the relevant information regarding their insurance policy such as levels of coverage, levels of service, policy exclusions or total premium.
- A pure fee-based market for example would exclude many people from access to any level of advice or assistance in their search for an adapted insurance product. EU Member States should not avail themselves of the option given in the IDD to limit or prohibit the acceptance or receipt of fees, commissions or other monetary or non-monetary benefits paid or provided to insurance distributors by any third party, or a person acting on behalf of a third party, in relation to the distribution of insurance products. In any case, any decisions of Member States to go beyond the IDD should always be under the condition of a level playing field between all distribution channels, non-distorted competition and proportional administrative burden.
- The IDD does not describe the triggering elements of the FOS and FOE activities of an intermediary. This is a missed opportunity. This would have helped in further clarifying what general good rules and stricter information requirements of the host Member State may have to be complied with by the intermediaries when they are considered as carrying out FOS/FOE activities in that Member State. It would also have created more legal clarity in identifying the relevant supervisor in cross-border situations. EIOPA should update its Luxembourg protocol on the issue as soon as possible.
- BIPAR promotes CPD but it must be noted that CPD requirements have the potential to be a demanding charge, particularly for micro operations and SMEs. The real impact will depend on how these requirements are implemented at national level. Proportionality is key in this respect.
- No ban on commission or fees has been introduced for insurance-based investment products (IBIPs). BIPAR welcomes this situation as every intermediary has the right to be fairly remunerated for his or her services. A pure fee-based market for example would exclude many people from access to any level of advice or assistance in their search for an adapted investment/ insurance product. When implementing the IDD, Member States should not go beyond these requirements and not do a copy paste of MiFID II requirements.