The Insurance Distribution Directive (IDD 2) was finally adopted by the Council on December 14 after years of revision of its predecessor IMD 1.

IDD 2 covers the entire distribution chain of insurance sales and is set to improve consumer protection. NFU has been involved in the process with IDD 2 from the start and several of our amendments were also included in the end.

Member States will now have to ensure that employees have sufficient time and resources to provide customers with sufficient information. At least 15 hours of professional training or development for the employees have to be in place per year.

The problem of too high sales targets, that NFU has raised continuously, was included in the final version of IDD 2. During the period of revision, there were proposals that employees have to provide detailed information about one’s variable remuneration to the customer. Those provisions have been removed in the final version.  Still, there are provisions that require that the insurance distributor provides pre-contractual information about the nature of remuneration received in relation to the insurance contract. NFU believes that this writing is better but not good enough. The provision should not interfere with the personal integrity of the employees and the EU should as a general rule not regulate pay as that interferes with the right of collective bargaining.

In addition, the Member States now have to ensure that there are whistle blowing mechanisms and that the identity of the whistleblower is protected. The employee who is reporting the breach should specifically be protected from at least unfair treatment, discrimination and retaliation.

IDD 2 will enter into force in January 2018, leaving the Member States two years to implement the Directive.