INSURANCE DISTRIBUTION DIRECTIVE:
WHAT IMPACTS IN THE AFTERMATH OF THE NORMATIVE WAVE?
THE VIEWS OF OUR EUROPEAN LAWYERS
Pablo Wesolowski – Wesolowski Abogados – traces the most significant points of the transposition of the Insurance Distribution Directive and its impact on insurance intermediaries in Spain
What are the most significant points in the transposition of IDD in your country?
The first notable point is the fact that Spain has not succeeded in implementing the IDD on time.
The second salient point concerns the new information and transparency requirements, which insurance intermediaries will have to implement.
The third one is the new regulation about comparisons websites on the one hand and ancillary insurance intermediaries on the other hand. Actually, these categories are not new: they already existed before, but they will now have to comply with the new requirements imposed on them.
The fourth salient point concerns the cross-selling of insurance products.
The last is the obligation to provide policyholders with accurate and detailed advice: insurance intermediaries must therefore be attentive to the content of the information they provide.
Have new categories of intermediaries emerged since the IDD came into force?
The only new category that has emerged as such in Spain is the so-called “direct sale” by insurance companies. In other words, they are now considered as distributors of their own products.
In addition, as mentioned above, there are two new categories which are not new, but which will have to comply with the obligations imposed on them: online comparison platforms and ancillary insurance intermediaries.
Surprisingly, another category has emerged in Spain: that of MGAs (Managing General Agents). However, the latter are not considered as insurance intermediaries and are therefore outside the scope of the draft law transposing the Directive. Spanish MGAs therefore receive a different treatment from their European counterparts, as they do not benefit from the passporting system.
Are these changes positive for insurance intermediaries, or do you think they could create new risks of liability?
In general, many of the new provisions are positive, such as those on transparency and information.
However, it will certainly create an increased risk of their professional liability being challenged, due in particular to additional information and advice requirements.
Are intermediaries ready to put these changes into practice?
They will manage to implement them gradually.
They are also grappling with other reforms – unrelated to the concept of distribution of insurance products or the implementation of the DDA – such as the one relating to the protection of personal data.