The Insurance Distribution Directive: What Does It Change for Intermediaries and for Others?

Abstract

The objective of this chapter is to describe how the IDD contributes to greater (and/or better) consumer protection and what the main differences are with the IMD. It is also the intention to give a flavour of the EU regulatory process and some indications on the interaction of IDD with other regulations. In this respect, the author hopes that this chapter will also contribute to the identification of the areas in which the sector can start preparing for the practical consequences of the IDD. This chapter refers to the IDD as published in the Official Journal of the EU (OJEU) on 2 February 2016.

Introduction

The Insurance Distribution Directive (IDD or previously IMD II) ¹ is a product of its time. The revision of the Insurance Mediation Directive (IMD) ² took place in the context of a financial crisis. In 2012, when proposing the revised Directive, EU Commissioner Barnier explained that “the EU will not truly have learnt from the crisis unless it adopts strong measures to restore investors’ and consumers’ trust”. ³ He added that the insurance sector did not cause the crisis and that it should be distinguished from the banking sector.

However, at the beginning of the debates on the IMD revision, and much to the “frustration” of the sector, the difference between insurance products with an investment element (later called insurance-based investment products (IBIPs)) and the non-life/pure-risk life insurance was either ignored or not nuanced. Later in the debates and thanks to information campaigns of the sector, this difference was better recognised.

It is interesting to recall that the IDD was also developed in parallel with MiFID II, Solvency II, ⁴ PRIIPs ⁵ and the (so-called) Mortgage Directive. During the IDD adoption process, developments regarding one proposal very often had an influence on the other proposals. Some elements became “horizontal” issues in the financial services legislations (such as cross-selling and sanctions provisions). The issue of whether or not conduct rules for IBIPs would have to be regulated under IMD II (later IDD), or under MiFID II ⁶ or under a separate Directive together with all other “packaged retail investment products”, was one that popped up on a regular basis. The so-called IMD 1.5 (i.e. the IMD as revised by MiFID II) was probably a kind of compromise which helped to reassure the supporters of a MiFID II approach that there would be harmonisation between the rules applicable to IBIPs and the MiFID II rules. The IDD is also the only Directive of the above-mentioned list that moved over the June 2014 EP elections and over from one Commission to another, the 2014 Juncker Commission.

The Juncker Commission initiated a new approach to financial services regulation. The EU Commissioner, Jonathan Hill, stated in January 2015:

Because of the steps taken over the last five years, the financial system is more stable than it was before the financial crisis. But today there is another threat to financial stability: the lack of jobs and growth. That helps shape my approach to regulation. It is why I have said that I want to look at the cumulative effect of the laws we have passed to make sure we have got the balance right between reducing risk and fostering growth. And if we find we haven’t got it exactly right, we should be confident enough to make changes. Now I am very conscious that businesses need regulatory stability in order to plan ahead. So I can say, although I will be taking forward measures to implement top level legislation, I do not intend to launch an avalanche of new regulation. ⁷

A Long Process of Negotiation

The IDD tripartite talks ( between the Presidency of the Council of the EU, the European Parliament and the European Commission, on the IDD proposal with the aim of finalising and adopting the Directive) was difficult because the Council’s approach regarding the IDD structure was rather different from that of the other two.

For example, even for insiders it was difficult to understand, when comparing the texts, what exactly the differences in scope were between the proposals. With the exception of some ancillary distribution channels (such as travel insurance and car rentals or telephone firms), there seemed to be an agreement between all parties to adopt a broad scope. In the Commission’s early proposal, some of these operators would have become “declared intermediaries…” while in the Council’s proposal they became “ancillary intermediaries”. The general line was known but some (important) details were discussed up until the last minute before an agreement was reached.

Another issue was the ultimate fate of the provisions regulating the distribution of insurance-based investment products introduced in the IMD as amended by MiFID II colloquially known as “IMD 1.5”. MiFID II was adopted in May 2014. ⁸ Its Article 91 amends the IMD I and introduces specific provisions in this Directive—dealing mainly with conflict-of-interest issues—governing the distribution of insurance-based investment products by intermediaries and insurers (i.e. the so-called IMD I.5). According to MiFID II, Member States had to implement the IMD 1.5 by 3 July 2016. In the meantime, there seems to be consensus that EU Member States will not implement IMD 1.5 but only the IDD.

IMD 1.5 was indeed a kind of “compromise”. At the time of the MiFID II/PRIIPs discussions, the IDD discussions were lagging behind. Also in between the MiFID II and PRIIPs and the IDD, there were European elections and a new European Commission. In other words, there was the possibility that the newly elected Parliament and/or the Commission would withdraw the IDD proposal or change its view entirely regarding the regulation of conduct rules for insurance “PRIIPs” which later became “IBIPs” (insurance-based investment products). ⁹ Some of the parties wanted safeguards that insurance-based investment products would come under a regime which would be “similar”, “comparable”, “harmonised” or “in line with” MiFID II-substitutable products. Some of the other parties did not want insurance-based investment products to be regulated in a MiFID II legal text. The IMD 1.5 was probably the compromised position. It guaranteed that conduct rules applicable to IBIPs came under a similar regime and that this regulation came under an insurance regulatory framework.

On 20 January 2016, after a four-year process, the two EU legislators, the Council of the EU (the Heads of State and Government) and the European Parliament, officially signed the Insurance Distribution Directive (IDD). It was published in the Official Journal (OJ) of the EU on 2 February. The IDD will become operational 20 days after the publication (23 February 2016) and Member States will then have two years to implement the text (by 23 February 2018). On 24 February, the European Commission requested the European Insurance and Occupational Pensions Authority (EIOPA) for its technical advice on the preparation of IDD Delegated Acts. The IDD empowers the Commission to adopt Delegated Acts to specify various regulatory requirements of the IDD on a variety of issues (Product Oversight and Governance Arrangements, Management of Conflicts of Interest, Inducements etc). The Delegated Acts are expected to be adopted by autumn 2017 (after adoption by the Commission, the EP and the Council will have scrutiny rights). Delegated Acts are binding on Member States, which will have to implement them by February 2018, the IDD implementation deadline. EIOPA has also started its work on the technical standards (e.g. the format of the Product Information Document).

The IDD repeals the IMD and also the IMD 1.5 (IMD as amended by MiFID II). The IDD is a minimum harmonisation directive. In other words, Member States, as they transpose the directive into national law, cannot do less than is required under the directive, but they may introduce additional measures if they deem it to be necessary to ensure the protection of consumers in their market.

The revision of the IMD was part of a “Consumer retail legislative package”, together with two other legislative proposals: a proposal for a regulation on key information documents for packaged retail investment products (PRIIPs ¹⁰ ) and a proposal to boost protection for those who buy investment funds (UCITS ¹¹ ). The aim of the package was “to improve competition and create a level-playing field in the insurance markets, to provide European consumers with better advice on the insurance products most suited to their needs, and clear information in advance on the status of the people who sell the insurance product and the remuneration which they receive and to introduce simplified, less burdensome rules on free provision and establishment of insurance services”. ¹²

A Wider Scope

One of the objectives of the IDD was to guarantee an effective protection of customers across all financial sectors and to guarantee that the same level of protection applies regardless of the channel through which customers buy an insurance product. ¹³

This explains why the IDD covers the distribution of not only non-life and life products, reinsurance products, but also insurance-based investment products (IBIPs). This also explains why the IDD applies to insurance distributors (when the IMD applied only to insurance intermediaries). Based on the new definition of the insurance distributor, the IDD encompasses a larger number of firms than the IMD.

The IDD applies to insurance intermediaries, of course, but also to direct writers, that is, to insurance undertakings which sell insurance products directly. The IDD (unlike the IMD) also expressly applies to certain activities conducted through price comparison websites: the IDD applies to persons whose activity consists of the provision of information on one or more contracts of insurance in response to criteria selected by the customer, via a website or other media or of the provision of a ranking of insurance products or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract at the end of the process. This is a key criterion. ¹⁴

The IDD applies to ancillary intermediaries. Who are they under the IDD? They are service providers and distributors of goods who distribute insurance products on an ancillary basis. The insurance products they distribute must be complementary to the goods or the services they are selling. And they must not cover life assurance or liability risks unless that cover complements the product or service which the intermediary provides as his principal professional activity. It is interesting to note that credit institutions or investment firms cannot fall under the definition of ancillary intermediaries. It means that when carrying out insurance distribution activity, those firms have to be entirely registered under the IDD.

However, those ancillary intermediaries are excluded from the IDD where the insurance they sell covers the risk of breakdown, loss of or damage to the goods or non-use of the service and also covers damage to or loss of baggage and other risks linked to travel booked with that provider; and where the amount of the premium for the insurance product does not exceed €600. In circumstances where the insurance is complementary to the good or service and the duration of that service is equal to or less than three months, the amount of the premium paid per person should not exceed €200. ¹⁵

This is quite a wide exemption. It could, for example, exclude many of the insurance distribution activities of the travel or car rental industry. In this respect, most travel insurances such as assistance insurance—are not simple or uncomplicated products and consumers need advice or recommendation. There are sometimes more than 20 different sections within a policy with all sorts of complicated requirements and exclusions (e.g. premedical conditions that would render the cover void). If not provided with the adequate cover, customers could end up, for example, with a large medical bill that is not covered. This can have serious consequences. It is interesting to note that some EU countries found sufficient cause for concern to bring the travel industry within the scope of their intermediary regulation (e.g. the UK in 2009).

It could also exclude, for example, any household content insurance provided by (often multinational) web shops selling furniture, bicycles, electronics, etc., or any package assistance linked to an e-connected car. National implementation may extend the scope.

Trying to limit the impact of the exemptions on consumer protection, the IDD states that any insurer or intermediary using the services of an exempted insurance intermediary will have the obligation to ensure that the latter complies with a series of information and conduct requirements listed below:

• Prior to the conclusion of the contract, customers must be informed about the identity and address of the insurer or intermediary, about procedures to lodge complaints

• Appropriate and proportionate arrangements should be in place to comply with Article 17 (to act honestly in the best interest of customers, no remuneration conflicting with the duty to act in the best interests of customers) and with Article 24 (cross-selling requirements)

• Appropriate and proportionate arrangements should be in place to consider the demands and needs of the customer before the proposal of the contract

• The Product Information Document (PID) is provided to customers before the conclusion of the contract.

The definition of insurance distribution contains important carve-outs excluding certain activities from that definition for the purposes of the Directive.

Although the IDD scope is wider than the IMD one, the insurance distribution activities of many ancillary intermediaries remain partly out of scope. This might be corrected in the implementation process. On the other hand, many private consumer protection rules are now also applicable to insurance for commercial clients. This may lead to unnecessary administrative burden.

New Information Requirements (Conflict of Interest Rules, Remuneration, Advice)

For the sake of better consumer protection, insurance distributors will have to act honestly, fairly and professionally in accordance with the best interests of their customers. ¹⁶ In particular, they cannot make any arrangements by way of remuneration or sales target that could provide an incentive to recommend a particular product to a customer when they could offer a different product that would meet the customer’s needs better.

Before the conclusion of the contract, consumers will be provided with clear information about the professional status of the person selling the insurance product and about the nature of remuneration which they will receive. This does not apply for large risks and for reinsurance distribution activities.

It is believed that the disclosure of these pieces of clear, meaningful and relevant information at contract level will help consumers to make informed decisions when purchasing insurance products. For non-life insurance and for pure risk life insurance, any additional disclosures would, however, 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 his or her insurance policy such as levels of coverage, levels of service, policy exclusions or total premium.

Regarding insurance-based investment products (IBIPs), there is no ban on commission or fees introduced in the IDD. This situation should be welcomed 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 appropriate insurance product, as has been the practical experience in Member States that have prohibited commission payment approaches.

The IDD introduces a detailed standardised Product Information Document (PID) ¹⁷ for all non-life insurance products. The PID is intended to be a precontractual and stand-alone document which aims to allow consumers to make an informed decision. The PID must be drawn up by the manufacturer of the insurance product. It shall be provided by the insurance distributor and shall contain information about the type of insurance, a summary of the cover, the means of payment of premiums and the duration of payments, the main exclusions, the obligations at the start, during the contract and in case of a claim, the term of the contract and the means of terminating the contract. The standardised presentation format of the PID will be developed by EIOPA through an “Implementing Technical Standard” (a form of secondary legislation). ¹⁸

The concept of a Key Information Document seems more relevant in an investment context (where the risk is transferred from the financial institution to the consumer) than in a non-life insurance context. Whether or not the PID—in a non-life insurance context—will lead to more problems than solutions will depend upon the practical details, national implementation and future interpretation by the courts.

Where advice is provided, the insurance distributor has to provide the customer with a personalised recommendation explaining why a particular product would best meet the customer’s demands and needs. Member States can make the advice mandatory for the sales of any insurance products. Important to note is that the Directive explicitly states that “Distributors operating under FOE/FOS in Member States where advice is mandatory, will have to comply with that stricter provision when concluding contracts with consumers having their habitual residence in that Member State”.

The IDD information requirements have been debated, discussed and studied by all those interested in the dossier both at national and European level for over six years. The result of the deliberations is seen in the Directive and it is the reflection of all these discussions. It is now probably time to stop discussions and implement the EU system that was decided.

Organisational Requirements

The key change is that the IDD introduces a new requirement of Continuing Professional Training and Development (CPD). ¹⁹ EU Member States will have to establish and publish mechanisms to effectively control and assess the knowledge and competence of insurance and reinsurance intermediaries and employees of insurance and reinsurance undertakings and employees of insurance intermediaries.

This should be based on at least 15 hours of professional training or development per year. It should be welcomed that the format and the contents of these 15 hours is to a certain extent flexible: it can include courses, e-learning or mentoring—the contents should take into account the nature of the products sold and the role of or the activity carried out by the person following the training.

Member States may require that the successful completion of the training and development requirements is proven by obtaining a certificate (but this is not compulsory). ²⁰

The principle of CPD is certainly good, but it must be noted that these CPD requirements have the potential to be a demanding charge for micro operations and SMEs in particular. The real impact will depend on how these requirements are implemented at the national level.

Another key change is that the IDD introduces in its annexure minimum relevant professional knowledge and competence requirements ²¹ for non-life, life and IBIPs products. Intermediaries will have to demonstrate compliance with these requirements.

The IDD does not introduce big changes regarding professional indemnity (PI) cover and financial guarantee requirements. The IDD sets a minimum professional indemnity insurance requirement for intermediaries of at least €1.25 million per claim or €1.85 m in the aggregate, unless such insurance or comparable guarantee is already provided by an insurance or other undertaking on whose behalf the intermediary is acting. ²² Ancillary insurance intermediaries will also be required to hold professional indemnity insurance.

Training is important but it should be flexible and adaptable to the needs of the firm and the employee. The EU framework leaves some flexibility to the national level and individual companies.

New Rules on Tying and Bundling (Cross-selling) Practices

The IDD requires in principle that where the insurance product is ancillary to a good or service, the good or service should be allowed to be purchased separately without the insurance. For example, when a new car is sold at a bargain price together with motor insurance, consumers will have the choice to buy the main good or service without the insurance policy.

The IDD does not prevent the distribution of insurance products which provide coverage for various types of risks (multirisk insurance policies).

The IDD also requires that where the insurance product is the main product and is sold with an ancillary product or service that is not insurance, the customer is informed whether the components can be bought separately.

EIOPA may develop guidelines for the assessment and the supervision of cross-selling practices.

Without going into too much detail here, it will be necessary, at the time of national implementation, to cross-check the rules of say MIFID II and the Directive on Credit agreements for consumers relating to residential immovable property (the Mortgage Directive). In the latter, for example, there is a ban on tying practices with exemptions.

Regarding insurance in this respect, (Article 12 Mortgage directive) Member States may allow creditors to require the consumer to hold a relevant insurance policy related to the credit agreement. In such cases, Member States shall ensure that the creditor accepts the insurance policy from a supplier different to his preferred supplier where such policy has a level of guarantee equivalent to the one the creditor has proposed.

The IDD in Article 24 reads as follows: “Where an insurance product is ancillary to a good or a service which is not insurance, as part of a package or the same agreement, the insurance distributor shall offer the customer the possibility of buying the good or service separately. This paragraph shall not apply where an insurance product is ancillary to an investment service or activity as defined in point 2 of Article 4(1) of Directive 2014/65/EU (“MiFID II”), a credit agreement as defined in point 3 of Article 4 of Directive 2014/17/EU (the “Mortgage Directive”) of the European Parliament and of the Council, or a payment account as defined in point 3 of Article 2 of Directive 2014/92/EU (Directive on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features) of the European Parliament and of the Council”.

IDD however, requires from Member States—in all cases of packaging—to ensure that an insurance distributor specifies the demands and needs of the customer in relation to the insurance products that form part of the overall package or the same agreement.

New Rules Regarding Product Oversight and Governance (POG) Requirements

The IDD introduces product oversight and governance requirements for “insurance undertakings and intermediaries which manufacture” any insurance products. POG requirements do not apply to insurance products which consist of insurance of large risks. The Commission is empowered to adopt Delegated Acts to specify the IDD principles on POG. ²³

Insurers and intermediaries manufacturing insurance products must maintain, operate and review a process for the approval of each insurance product (or significant adaptation) before it is marketed or distributed to customers. Insurers and intermediaries manufacturing insurance products must also make available to any distributor all appropriate information on the insurance product and the product approval process, including the identified target market of the insurance product.

Insurance distributors advising or proposing products they have not manufactured must have in place arrangements to obtain information on the insurance product and the product approval process and to understand the characteristics and identified target market of each insurance product.

It is important to pay attention to the product design and governance and to ensure that products on offer in the EU market are fit for consumers’ needs. In this respect, manufacturers’ POG arrangements setting out measures and procedures aimed at designing, monitoring, reviewing and distributing products for customers can play a role to avoid improper selling. However, too many prescriptive requirements on POG should also be avoided to minimise the resulting additional costs and administrative burden that could ultimately get passed on to consumers. In this respect, a clear distinction should be made between investment products and non-life products. Even more important is that the detailed rules (under preparation at the time of writing) should not lead to an overlap with the IDD point-of-sales rules.

Rules which are too prescriptive could result in a real administrative burden, a less innovative, less flexible and less consumer-friendly market.

It is worth noting that no study or impact assessment has indicated a particular need for detailed POG requirements for non-life insurance products (e.g. motor, home) or certain pure-risk life insurance products. It is also worth noting that Article 25 places product governance and oversight requirements mostly on “insurance undertakings, as well as intermediaries which manufacture any insurance product”—and not on intermediaries that do not manufacture products. Article 25 of the IDD furthermore refers to the need of appropriate and proportionate measures.

It is important that level 2 or national rules on POG do not lead to an overlap with the IDD point-of-sales rules and take into consideration the need of appropriate and proportionate measures. Too prescriptive rules could result in a less innovative, less flexible and less consumer-friendly market.

What Are the Key Changes Regarding Cross-border Activities Brought by the IDD?

One of the objectives of the IMD II proposal (later the IDD) was to facilitate single market integration and to promote cross-border activities of intermediaries. ²⁴ More clarification is given in the IDD on the division of competence between the home and host Member States. Broadly speaking, when the intermediary is passporting on a FOS basis, its home Member State is responsible for ensuring compliance with all IDD requirements. When the intermediary is operating on a FOE basis, the host state concerned is responsible for ensuring compliance with IDD information and conduct-of-business requirements. Its home Member State is responsible for everything else. ²⁵

All intermediaries are subject to relevant “general good” provisions that the host state may impose. Any Member State which possesses additional “general good”-type rules will need to ensure that these are made publicly available. See also above for the specific case of those Member States that make advice compulsory. ²⁶

The host Member State receives more powers in the IDD than in the IMD. An example is the situation where the intermediary who is exercising FOS breaches IDD obligations: the new IDD regime includes provisions on the split of jurisdiction between home and host Member State regulators in such a case. Any breaches of the Directive will need to be referred back to the competent authority of the home Member State in the first instance which can remedy the situation. If not enough, the host Member State can take its own actions to prevent the intermediary from carrying out its activities on its territory or to penalise irregularities.

Another change in this respect, compared to the IMD, is that the Member State of the primary place of business of the intermediary can act as the host regarding Chaps. IV–VII of the IDD, that is, organisational requirements, information requirements and conduct-of-business rules, IBIPs and sanctions.

In other words, according to the IDD, the home Member State may agree that another Member State will act as home Member State if the intermediary’s primary place of business is located in that other Member State.

The IDD does not clearly describe the triggering elements of the FOS and FOE activities of an intermediary. This creates legal uncertainty in some cases.

Additional Requirements in Relation to Insurance-Based Investment Products (IBIPs)

The IDD contains a specific chapter with additional requirements for insurance-based investment products distributed by insurance undertakings and intermediaries, meaning that they come on top of the requirements in the general part of the Directive.

The IDD explicitly recognises the differences between IBIPs and investment products and that IDD is the place to regulate them (recital 10) but at the same time indicates that there is need for alignment with MiFID II and that, due to their specific character, there is need for a separate chapter on IBIPs (recital 56).

Intermediaries and undertakings have to make (proportionate) arrangements to prevent conflicts of interest ²⁷ from adversely affecting the interests of their customers and must take steps to identify conflicts of interest. If the arrangements are insufficient to ensure that the risk of damage will be prevented, there is a requirement of disclosure of the general nature or sources of conflicts of interest in good time before the conclusion of the contract. Disclosure has to be detailed and has to be done on a durable medium. The IDD contains Delegated Acts to define the “expected steps to be taken” to deal with conflicts of interest and to establish criteria for determining types of conflicts of interest that may damage the interests of customers. In this respect, it is probable that EIOPA will look at its IMD 1.5 technical advice on conflicts of interest. ²⁸

Information regarding the distribution and all costs and related charges has to be provided in good time, before the conclusion of the contract. This includes at least information on the availability or otherwise of a periodic suitability assessment; on the risks and on the costs including the cost of advice and how the customer pays for it including any third-party payments. The presentation of costs and information in general has to be aggregated, on request itemised, where applicable, to be provided regularly and in a comprehensible form (there is a possibility for Member States to standardise). It is to be noted that for IBIPs, there will also be a Key Information Document (KID) according to the PRIIPs Regulation. ²⁹

The IDD does not contain a provision as the one in MiFID II on independent advice linked to a ban on commission. ³⁰ Instead, IDD leaves it to Member States that for independent advice, they may require the assessment of a sufficiently large number of products available on the market that are adequately diversified.

Where MiFID requires benefits to enhance the quality of the service to the client ³¹ (and not against the criteria to act honestly, fairly, professionally and in the best interests of the client), IDD allows them, if there is no detrimental impact on the quality of the service and it is not against the criteria to act honestly, fairly, professionally and in accordance with the best interests of its customers.

The IDD explicitly foresees the possibility for Member States to go beyond (e.g. prohibition of commissions, return to the client). Also in this chapter of additional requirements for IBIPs, the possibility of introducing mandatory advice is explicitly foreseen. Any stricter requirements have to be respected in case of FOS and FOE.

Delegated Acts are expected to specify the criteria for “detrimental impact” and the assessment criteria for compliance of inducements with the requirements to act honestly, fairly, professionally and in the best interests of the customer. They shall take into account the nature of the services and of the products.

Considering the Delegated Acts, the timeline of the IDD is probably not realistic, as legislators may have underestimated the time necessary to develop realistic level 2 rules. Furthermore, national legislative mechanisms are probably not always adapted to the three-level EU system.

Implementation Challenges

Insurance intermediaries already registered under the IMD I will be given three years after the IDD comes into force, to comply with their respective and relevant provisions of national law related to professional and organisational requirements.

The most important challenge in the introduction of IDD will be to avoid goldplating and the introduction of measures that go beyond the requirements specified in the Directive. Another challenge will be to also have effective level 2 and level 3 measures that do not provide additional layers of requirements. It must be remembered that all of this regulation is cumulative and is extremely costly.

IDD level 2 and 3 measures have the potential, even before goldplating by EU Member States, to heap on additional and unnecessary costs. Sometimes well-meaning regulations or rules target abuses—that whilst serious are thankfully very peripheral to the market—with measures that have consequences for all contracts of insurance and all policyholders who are experiencing no difficulties whatsoever.

I hope that EU Member States won’t overregulate and that the IDD will be treated as a maximum (and not a minimum) harmonisation Directive. Once implemented, also considering the new sanctions regime, time should be left to the market and the regulators and supervisors to bring the new rules to reality—this takes time—and to enforce them adequately before creating new rules. In this respect, a point for reflection: The sum of various layers of regulations results in an ever-increasing (often unnecessary) cost which is being borne by consumers and by the European economy at large.

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Notes

• 1. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution.

• 2. Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation.

• 3. Michel Barnier, EU Commissioner responsible for the Internal Market and Services, “Revision of the Insurance Mediation Directive (IMD)—A Priority: consumer protection”- BIPAR Conference at the European Parliament, Brussels, 19 June 2012.

• 4. Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance.

• 5. Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs).

• 6. Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in Financial Instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.

• 7. Jonathan Hill, Commissioner responsible for Financial Stability, Financial Services and Capital Markets Union—“Insurance distribution in the single market—Meeting consumers’ needs in the internet age”—Speech at BIPAR mid-term meetings, Brussels, 30 January 2015.

• 8. Directive 2014/65/EC of the European Parliament and of the Council on markets in financial instruments.

• 9. Directive 6404/14 ADD 1 (IMD1.5), Article 98a, Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Chapter VI.

• 10. Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs).

• 11. Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions.

• 12. European Commission’s memo on the revision of the IMD, 3 July 2012.

• 13. Commission 2012 staff working document executive summary of the impact assessment accompanying the document proposal for a Directive of the European Parliament and of the Council on insurance mediation.

• 14. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 1.2.

• 15. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 1.3.b-c.

• 16. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 17.1.

• 17. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 20.5-7.

• 18. EIOPA-CP-16-007 Consultation Paper on the proposal for the Implementing Technical Standards on a standardised presentation format of the Insurance Product Information Document (IPID) under the Insurance Distribution Directive (IDD).

• 19. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 10.2.

• 20. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 10.2.

• 21. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Annex 1.

• 22. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 10.4.

• 23. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 25.

• 24. Commission 2012 staff working document executive summary of the impact assessment accompanying the document proposal for a Directive of the European Parliament and of the Council on insurance mediation.

• 25. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 4.

• 26. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 4-5.

• 27. Directive 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution, Article 19.

• 28. EIOPA-BoS-14/061, 21 May 2014, Discussion Paper Conflicts of Interest in direct and intermediated sales of insurance-based investment products (PRIIPs).

• 29. Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs), Article 4.

• 30. Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast), Art. 24.7.b.

• 31. Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast), Art. 24.9.a.