UK's FCA publishes insurance distribution directive consultation
The UK’s Financial Conduct Authority (FCA) has come up with the first of its two consultation papers on the execution of the Insurance Distribution Directive (IDD), which is designed to promote competition among insurance firms and maintain appropriate protection levels for customers across the European Union.
The IDD aims to strengthen and consolidate the existing rules of IMD.
The IDD, with which the UK is required to comply by 23 February 2018, concerns the distribution of insurance and reinsurance, and also covers assisting in the administration and performance of an insurance contract post-sale.
The consultation paper covers the FCA’s proposals for the application of the directive, which include the following areas:
- professional and organisational requirements
- complaints handling and out-of-court redress
- professional indemnity insurance (PII)
- changes to conduct of business rules (for non-investment insurance contracts)
- the regulatory regime for ancillary insurance intermediaries
The IDD will apply more broadly than the IMD and bring consumer protection rules in line with those in other financial markets.
FCA Strategy and Competition Executive Director Christopher Woolard said: "This directive is a significant piece of legislation with implications for the insurance industry as a whole. Many of the changes extend UK standards to other parts of the EU and where domestic provisions already exist we will seek to minimise the disruption to UK firms."
"As well as encouraging competition between insurance intermediaries, this directive will continue to ensure protection for insurance customers."
The second consultation paper will be published later this year and will include matters such as those IDD requirements which are yet to be adopted by the EU Commission. It will also address the FCA’s approach to the conduct requirements for life policies which are being considered in the light of ongoing implementation of the Markets in Financial Instruments Directive (MIFID) II.
Source: Company Press Release