The Economic and Monetary Affairs (ECON) Committee has voted in favour of the final draft wording of the Insurance Mediation Directive (IMD II). The next step is for the new Directive to be debated before the EU Parliament in a plenary session between 24 – 27 February, 2014.
If adopted in its present form, the IMD II will introduce a number of significant changes. Currently, only insurance agents, brokers and tied insurance intermediaries are covered by the existing Insurance Mediation Directive. The new Directive will extend the scope of application to various sellers of insurance products in the EU, including (re)insurance companies that sell insurance directly to consumers, claims management companies, loss adjustors, certain price comparison websites as well as persons who sell insurance products on an ancillary basis.
The most controversial aspect of the IMD II is the requirement for insurance intermediaries to disclose their remuneration (i.e. fees, commissions and/or bonuses) to policyholders. Furthermore, special information requirements will also apply where sellers adopt the practice of ‘bundling’ insurance products together.
If approved by the EU Parliament, the IMD II will then require the consent of the EU council. Work on the Level II measures will start thereafter, with entry into full force most likely by early 2016.