Insurance distribution

EU rules on insurance distribution

Insurance distribution means to sell, propose to sell, advise on or prepare in any other way the conclusion of insurance contracts. It also covers sales of insurance products through websites, including comparison websites if they allow concluding an insurance contract.

The sale of insurance products in the EU is regulated by the insurance distribution directive (IDD) adopted in 2016. The IDD applies to all sellers of insurance products

• insurance intermediaries, such as agents and brokers, which have to be registered in their home country and meet certain minimum requirements
• insurance companies that sell directly to consumers
• and also to so-called “ancillary insurance intermediaries”. These are businesses offering insurance as an add-on to products and services proposed by them. Typical examples include travel agencies or airlines offering travel insurance or sellers of electrical appliance proposing insurance against theft and damage

Under the IDD, consumers and retail investors buying insurance products benefit from

• greater transparency in the price and costs of insurance products
• a simple, standardised insurance product information document (IPID) providing clearer information on non-life insurance products, so that consumers can make more informed decisions
• where insurance products are offered in a package with another product or service, for example when a new car is sold together with motor insurance, consumers will have the choice to buy the main product or service without the insurance policy
• rules on transparency and business conduct to help consumers avoid buying products that do not meet their needs.

Relevant legislation

Commission proposes new application date for the insurance distribution directive - 20 December 2017

Commission adopts two delegated regulations supplementing the insurance distribution directive - 21 September 2017