Insurance Distribution Directive published in Official Journal of the EU


Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution was published in the Official Journal on 2 February 2016.

1. In general

The Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (IDD) (previously named ‘Insurance Mediation Directive 2’), repeals and recasts the Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation (IMD). This new Directive covers the entire insurance distribution chain (i.e. insurance undertakings as well as intermediaries).

The European Commission first proposed to update IMD in 2012 as part of a package of measures to ensure a high level of consumer protection in the distribution of financial services.

Introducing more strict conduct-of-business rules, IDD will complement the rules on the sale of investment products under the Markets in Financial Instruments Directive II (MiFID II) and on key information documents for packaged retail and insurance-based investment products (PRIIPS).

2. Objective of the Insurance Distribution Directive

IDD seeks to improve retail insurance regulations in order to facilitate market integration, establish the conditions necessary for fair competition between distributors of insurance products and strengthen policyholder protection.

3. In a nutshell: what will change?

With the entry into force of IDD, some important changes will be made to the insurance landscape. These include:

  • Extended scope: IDD applies to all intermediaries and also to insurance and reinsurance undertakings that sell directly to their customers.
  • Additional professional requirements have to be fulfilled: an obligation to continue professional development is imposed as well as competence requirements for people carrying out (re)insurance distribution activities.
  • New rules for cross-selling and bundled products: an information obligation to the customers applies when insurance products are offered together with another non-insurance product or service or as part of a package.
  • More strict conduct-of-business and information requirements: insurance distributors are required to be more transparent about the price and costs of their product.

 4. Further steps

The European Insurance and Occupational Pensions Authority (EIOPA) has been given the power to draft technical standards (TS) which ensure consistent harmonisation and adequate protection of consumers across the EU.

IDD will enter info force 20 days after its publication in the Official Journal, hence on 22 February 2016.

EU Member States have until 23 February 2018 to transpose the Directive into national law.


Related links:

Insurance Distribution Directive