Insurance Distribution Directive: A Legal Analysis

Preface
AIDA Europe
Contents
Abbreviations
Part I: The Harmonization Achieved under the Insurance Distribution Directive
Insurance Distribution Directive and Cross-Border Activities by Insurance Intermediaries in the EU
1 Introduction
2 Simpler and Clearer Rules for Cross Border Activities by Insurance Intermediaries?
2.1 Some Background
2.2 A Simplified and Clearer Notification Procedure?
2.3 No Clarification Regarding the Triggering Element of Cross Border Activities
2.4 EIOPA Clarifications
2.5 General Good Rules: Will More Transparency Be Enough to Avoid Their Possible Detrimental Impact on the Single Market?
3 New Division of Competence Between Home and Host Member State Authorities and the Possible Impact on Intermediaries´ Passpor...
3.1 Powers Given to Host Member States Over Intermediaries Operating Under FOS in Their Territories
3.2 Powers Given to Host Member States Over Intermediaries Operating Under FOE in their Territories
4 Towards More Cross-Border Activities of Insurance Intermediaries?
4.1 IDD Passport, Digitalisation and Consumers
4.2 The Impact of Brexit on Cross-Border Activities of Insurance Intermediaries
5 Final Remarks
References
Legislation
Documents
Information Duties Stemming from the Insurance Distribution Directive as an Example of Faulty Application of the Principle of ...
1 Introduction
1.1 The Argument
1.2 The Method
2 Principle of Proportionality: What Does It Mean and How Do We Know It Is Respected?
3 Information Duties Set Out in the IDD
3.1 What Stands Behind the Information Duties? Reasons for Implementation
3.2 Overview of the IDD´s Information Duties Relevant for Non-Life Insurance
4 Proportionality Test
4.1 Are the Information Duties Introduced by the IDD Directive Suitable to Ensure the Customer´s Protection?
4.2 Are the Information Duties Introduced by the IDD Directive Necessary to Ensure the Customer´s Protection?
4.2.1 The Objective Will Not Come by Itself
4.2.2 The Objective Cannot Be Achieved by Other Measure Which Is as Useful as Measure Applied and Less Harmful for Other Inter...
4.2.3 Totality of Regulation
4.2.4 Excess Complexity
4.3 Is There an Appropriate Balance Between the Damage Suffered by the Customers (e.g. Consequences of the Information Overloa...
5 Concluding Remarks
Annex I
References
Legislation
Documents
The Contribution of Product Oversight and Governance (POG) to the Single Market: A Set of Organisational Rules for Business Co...
1 Introduction
2 The Origin of POG as a Regulatory Response Based on Principles of Businesses
3 The Transposition of POG in the EU Law: Organizational Rules for the Business Conduct
4 POG and the Single Market in Insurance: The Current Effects
4.1 The Potential Effects
References
Legislation
Documents
The IDD and Its Impact on the Life Insurance Industry
1 Introduction
1.1 The Distributor´s Remuneration
1.2 Distributors´ Liabilities: Life Insurance
1.2.1 Scope of Distributors: Dual Responsibilities
1.2.2 Impact on International Activities (Free Passporting Service (``FPS´´))
1.3 Inducements
2 The Need for Regulation: Specific Professional and Organizational Requirements
3 Special Requirements Relating to Information, Advice, Remuneration
3.1 Information Requirement and the Duty to Act in the Customers´ Best Interests
3.2 Advice Requirement
3.3 Exemptions from Information Requirements
3.4 Stricter Information Provisions
3.5 Information Conditions
3.6 New Information Requirements
3.7 Conflict of Interest
4 Product Oversight and Governance
5 Impact of the IDD
5.1 Impact with Regards to the Life Insurance Sector
5.2 Assessment of Suitability
6 A Comparison of the EU and U.S. Insurance Distribution Regulatory Regime
7 Conclusions
References
Legislation
Documents
Insurance-Based Investment Products: Regulatory Responses and Policy Issues
1 Introduction
2 Disclosure of Information
3 Conflicts of Interest
4 Inducements
5 Demands and Needs Test
6 Suitability and Appropriateness Assessment
7 Non-complex Insurance-Based Investment Products
8 Sustainable Finance and IBIPs
9 Policy Issues and Next Steps
10 Conclusion
References
Legislation and Other Legal Instruments
Part II: The Insurance Distribution Directive as a ``Benchmark´´ for National Legislators
The Notion of ``Employee´´ in the IDD: A Harmonized Interpretation Based on the EU Law
1 Introduction
2 Brief Historical Background
3 Application of the IDD to Employees of Insurance Undertakings
4 Defining an ``Employee of the Insurance Undertaking´´: Contractual Relations
5 Scope of Distribution Activities Performed by Employees of Insurance Undertakings
6 Conclusions
Legal Acts
Case Law: European Court of Justice
Other Sources
Ensuring the Customer´s Best Interest in the Polish Insurance Market
1 Introduction
2 The Principle of the Customer´s Best Interest in Light of European and Polish Financial Markets Law and Polish Supervisory P...
2.1 European and Polish Insurance Law
2.2 MiFID
2.3 MiFID vs. IDD
2.4 Polish Supervisory Practices on the Insurance Market
2.5 Responsibility Linked to the Principle of the Customer´s Best Interest in the Polish Legal System
2.6 Best Interest in Light of the PFSA´s Recommendations
3 Ensuring the Customer´s Best Interest in the Polish Insurance Market
3.1 Actions Aimed at Ensuring the Customer´s Best Interests
3.2 Distributor´s Remuneration and the Customer´s Best Interests
3.3 Ensuring the Best Interest of the Customer as a Way to Limit Misselling
4 Conclusion
References
Insurance Distribution Carried Out by Insurers in Spain
1 Introduction
2 Governance System of Insurance Companies
3 A New Area?
4 The Requirements of Good Repute
5 The Appropriate Knowledge
6 Professional Training
7 The Policies and Procedures
8 The Supervision of the DGSFP
9 Conclusions
References
Enaction of Chapter VII of the Insurance Distribution Directive: What Can Member States Learn from the Enforcement Failures of...
1 Introduction
2 Broad Landscape of the Unites States´ Regulation of Insurance Intermediaries
3 Insurance Distribution Directive Overview
4 Comparing the Producer Licensing Model Act with the Insurance Distribution Directive
4.1 Organizational Requirements
4.2 Duties of Insurance Intermediaries/Producers
4.3 Sanctions, Penalties, and Other Measures
5 How the United States Enforces Insurance Intermediary Regulations
5.1 California Enforcement
5.1.1 Duties of California Insurance Intermediaries/Producers
5.1.2 California Sanctions, Penalties, and Other Measures
5.1.3 California Case Law
5.1.4 California Enforcement Summary
5.2 Michigan Enforcement
5.2.1 Duties of Michigan Insurance Intermediaries/Producers
5.2.2 Michigan Sanctions, Penalties, and Other Measures
5.2.3 Michigan Case Law
5.2.4 Michigan Enforcement Summary
5.3 Alabama Enforcement
5.3.1 Duties of Alabama Insurance Intermediaries/Producers
5.3.2 Alabama Sanctions, Penalties, and Other Measures
5.3.3 Alabama Case Law
5.3.4 Alabama Enforcement Summary
6 Structures for Enforcement in the United States and the European Union
7 What Can Member States Learn from the Enforcement Failures of the United States?
References
What Can the Insurance Distribution Directive ``Offer´´ the South African Microinsurance Model?
1 Introduction
2 The Insurance Distribution Directive
2.1 Introduction
2.2 Scope of Application
2.3 Disclosure Requirements of the IDD
2.4 Consumer Needs
2.5 Product Oversight and Governance Requirements
2.6 Pre-Contractual Information
2.7 Preliminary Remarks
3 The Concept of Microinsurance
3.1 Introduction
3.2 Microinsurance on an International Level
3.3 Principles for an Effective Microinsurance Model
4 Microinsurance in South Africa
4.1 History of Microinsurance
4.2 Policyholder Protection Rules on Microinsurance
4.2.1 Introduction
4.2.2 Specific Rules on Microinsurance
4.2.2.1 Outline
4.2.2.2 Structure of the Policy
4.2.2.3 Waiting Periods
4.2.2.4 Exclusions
4.2.2.5 Excesses
4.2.2.6 Claims Process
4.2.2.7 Reinstatement
4.3 Policyholder Protection Rules on Product Design
4.4 Disclosure Requirements in Terms of the PPRs
5 What Can South Africa Take Away from the IDD to Enhance the Current Microinsurance Provisions?
6 Conclusion
References
Articles, Documents and Textbooks
Legislation
Part III: The Interplay Between the Insurance Distribution Directive and Other Regulations/Sciences
The Interplay Between the GDPR and the IDD
1 Introduction
1.1 Similar Origins and Parallel Lives
1.2 Impact on Insurance Activities
2 GDPR and IDD Interaction Affecting Internal Functions
2.1 Product Oversight and Governance Requirements for Manufacturers
2.1.1 Product Approval Process
2.1.2 Product Monitoring Phase
2.2 Product Distribution Arrangements
2.2.1 Choice and Audit of Appropriate Distribution Channels
2.2.2 Product Distribution Arrangements
2.3 Related Data Protection Issues
2.3.1 Privacy by Design and by Default
2.3.2 Transparency and Information Issues
2.3.3 Other Privacy-Related Implications
3 GDPR and IDD Implications in the External Relations
3.1 Relations with Customers
3.1.1 Choice of Insurance Product: Risk Assessment
3.1.2 Precontractual Information Obligations
3.2 Relations with Other Insurance Market Players
3.2.1 Insurer: Intermediary Relation
3.2.2 Relations Between Competitors
4 Summary and Conclusions
References
Regulatory Guidance and Decisions
Regulating Telematics Insurance
1 Introduction
2 Telematics Insurance and the General Data Protection Regulation
2.1 Telematics Insurance
2.2 The General Data Protection Regulation (GDPR)
2.3 GDPR Discussions on the Scope of Information Requirements
3 Telematics Insurance and the Insurance Distribution Directive
3.1 The Insurance Distribution Directive (IDD)
3.2 IDD: Product Oversight and Governance (POG) Requirements
3.3 IDD: Information Disclosure Requirements
3.4 Product Oversight and Governance
3.5 Information Disclosure: The Insurance Product Information Document
4 The GDPR and IDD Proposed Information Requirements
4.1 Interaction Between the GDPR and IDD
4.1.1 Better Informed Decision Making
4.1.2 Improve Accountability and Responsible Business Practices
4.1.3 Balancing Information Requirements
4.1.4 Information Disclosure: Proposed Scope
4.2 Information Disclosure: GDPR and IDD Integration for Better Compliance
4.2.1 The IDD Contributes to Transparency in and About Insurance
4.2.2 Recommendations: Self-Regulation Regarding Information Disclosure
4.2.3 Recommendations: Include Privacy Information/Icons on the IPID
Annex I
References
Considering the IDD Within the EU Legal Framework on ADR Systems
1 Introduction
2 ADR Systems from the USA to the EU: Distinctive Features and Common Purpose
3 The Main EU Regulatory Actions Regarding ADR Systems
4 The Role of the IDD Directive Within the EU Legal Framework on ADR Procedures
5 Issues About Implementing the ADR System in the Insurance Sector
5.1 The System´s Setting
5.2 The Adherent Subjects
5.3 The Customers
5.4 The Nature of Disputes
5.5 The Procedure
6 Closing Remarks
References
Legislation
IDD and Distribution Risk Management
1 Introduction
2 Digital Transformation and the Changing Landscape for Insurer´s Distribution and Value Chain
3 The Multiple Faces of Distribution Risk in Insurance
4 The Impact of IDD on Distribution Risk Management
5 Conclusions
References
Legislation and Other Documents
Redefining Product Management: IDD´s Perspective
1 Introduction
2 IDD as a Response to the Needs of the Market
3 Definitional Problems
4 Manufacturer
5 Identification of Target Market
6 Impact of the IDD on Insurance Market´s Participants
7 Conclusions
References
Legislative Instruments
Documents
Part IV: An Empirical Analysis of the Standardised Pre-Contractual Information Document
The Reality of the Promised Increase in Customer Protection Under the Insurance Distribution Directive
1 Introduction
1.1 Hypothesis and Methodology
1.2 Structure
2 Introduction to Customer Protection Under the IDD
3 Insurance Product Information Documents (IPIDs)
3.1 The Rules on IPIDs
3.2 EIOPA´s Work on the Standardised Presentation Format
3.3 IPIDs in Practice
3.3.1 What Is Comparable Information?
3.3.2 Examination of IPIDs
3.3.2.1 The Application of the Standardised Presentation Format in General
3.3.2.2 Examination of Contents Insurance Products
3.3.2.3 Examination of Compulsory Third Person Motor Liability Insurance
3.3.2.4 Examination of Compulsory Workers´ Compensation Insurance
3.4 Discussion
3.4.1 The Application of the Standardised Presentation Format in General
3.4.2 The Heading ``What Is This Type of Insurance?´´
3.4.3 The Headings ``What Is Insured?´´, ``What Is Not Insured?´´ and ``Are There Any Restrictions on Cover?´´
3.4.4 The Heading ``Where Am I Covered?´´
3.4.5 The Headings ``What Are My Obligations?´´, ``When and How Do I Pay?´´, ``When Does the Cover Start and End?´´ and ``How ...
3.4.6 The Description of Add-Ons in the IPID
3.4.7 The Use of Plain Language in the IPID
3.5 Summary and de lege ferenda
4 Conclusion
Danish Legislation
EU Legislation
EU Preparatory Work