The Insurance Distribution Directive – what is it all about?
11 Aug 2020
The Insurance Distribution Directive (IDD) came into force with the intention of protecting consumers by regulating intermediaries. This complements the ever-increasing need to treat customers fairly by developing a compliant, competent and highly trusted industry.
Why was the Insurance Distribution Directive launched?
The IDD has been designed to make it easier for firms to cross-border trade within the EU, create a level playing field among all participants and strengthen policyholder protection when purchasing insurance.
Of notable importance is the requirement for all manufacturers and distributors to undertake 15 hours of CPD training per year to ensure that they are able to perform their tasks and duties adequately. Salient features of the directive dwell on product governance, the need for clear and transparent documentation and conduct requirements, the latter being specified under the conduct of business rule book issued for this purpose.
Being it is a directive, the EU allows each and every member state to transpose the IDD into national law and gold plating it as required. In fact, in Malta this directive has been transposed into national law by virtue of the Insurance Distribution Act chapter 487 which was enacted in 2008 and came into force on the 1st October of the same year.
The Malta International Training Centre
The Malta International Training Centre through its on-going courses and online webinars, is continually providing training on regulation and supervision which includes sections of the Insurance Distribution Act and its corresponding rulebook provisions. These sessions serve to summarise the salient aspects of the directive and to provide updates to the participants as well as to provide CPD opportunities for one’s career development.
Details of forthcoming regulatory session - Compliance duties under the IDD may be found here.