INSURANCE DISTRIBUTION DIRECTIVE:
WHAT IMPACTS IN THE AFTERMATH OF THE NORMATIVE WAVE?
THE VIEWS OF OUR EUROPEAN LAWYERS
Ireland – Peter Lennon, RDJ
What are the most significant points in the transposition of IDD in your country?
There are number of them, particularly related to intermediaries. Most of them relate to the way in which intermediaries now have to transact their business with consumers.
This Directive is particularly focused on the provision of information to consumers about the policies that they are buying and also, particularly focused on the training of those persons who are working for intermediaries to insure that they are aware of what they are selling. That’s one of the main areas that have seen significant change.
I think the other is the increase in Professional Indemnity requirements for intermediaries and ensuring they are now insured up to the increased levels.
It’s also a challenge in deciding what you are: Are you a manufacturer? Are you a producer? Are you an intermediary? And all of those issues are challenging for intermediaries that we act for and that CGPA insure in Ireland to understand what exactly is their role under the Directive.
Have new categories of intermediaries emerged since the IDD came into force?
I don’t think the categories of intermediaries have changed, and I don’t think we are seeing any new Intermediaries. Nevertheless, we are seeing categorisation within the intermediaries. I think retail brokers and those who are selling contracts of insurance directly (which are completely under the Directive) are a new category, but it’s mostly in what we would call retail sales and in life & pensions or investment products where that particular types of intermediaries are now probably better classified than they were before.
Are these changes positive for insurance intermediaries, or do you think they could create new risks of liability?
I think with every Directive there are values and there are also issues. There are clearly significant values in terms of training, in terms of standardisation of forms and compliance with information. But clearly failure to comply with those particular forms and failure to comply with the specifics of the Directive is almost certainly going to give a further potential avenue for attacks on intermediaries in relation to broker’s negligence.
Are intermediaries ready to put these changes into practice?
I don’t think that the insurance intermediary market was quite as ready as it should have been, but hopefully it will bed down and hopefully insurance intermediaries will get to grips with it.
It certainly is challenging for them when already they are changes being talked about in Brussels in terms of enlarging the Directive.