Final compromise text is approved on the Insurance Distribution Directive

Significant developments have taken place concerning the proposal of the Insurance Distribution Directive („IDD”) establishing new rules on insurance distribution.

On July 17, 2015 the final compromise text of the IDD was published by the Council of the EU. On July 22, 2015 the Permanent Representatives Committee (Part 2), has approved, on behalf of the Council an agreement, reached with the European Parliament on the IDD. With the latter step, the EU legislative process for IDD is nearly completed.

The IDD was introduced by the Council of the EU in 2012 as a recast proposal to the Directive 2002/92/EC on insurance mediation (“IMD”) that regulates the distribution of products of insurance intermediaries. The IDD was previously referred to as the Second Insurance Mediation Directive (“IMD2”). This, however, was changed in September 2014 to reflect better the directive’s focus on regulating the distribution of insurance products that covers not only the insurance intermediaries.

The IDD, like IMD, is a minimum harmonization directive. Thus, the member states will be allowed to set higher standards when implementing the IDD. 

The IDD will now be submitted for final adoption. Once it has been accepted we shall provide further details on the main changes to be expected by the insurance market participants as a consequence of the directive’s implementation in Hungary. 

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