EIOPA has published its first report on the application of the Insurance Distribution Directive. The IDD requires EIOPA to produce such a report every 2 years, but EIOPA postponed the delivery of this report from 23 February 2020 to December 2021 due to the delayed application date of the IDD and delayed reporting requirements as a result of the Covid-19 pandemic.
In particular, the report examines changes in the insurance intermediaries’ market structure and the impact of the IDD on insurance intermediaries. It also considers the ability of competent authorities to carry out their tasks.
The main findings include:
- The IDD has, in general, had a positive impact on how insurance is distributed to consumers, but EIOPA also identifies difficulties in applying the demands-and-needs test, as well as concerns relating to the sale of particular products and policies;
- Between 2016 and 2020, there has been a decrease in the number of registered intermediaries, but in that same period the number of intermediaries with a passport to carry out cross-border business increased in most Member States;
- Some challenges were identified in relation to insurance distributors applying, and NCAs supervising, the IDD rules regarding disclosures due to a lack of additional guidance;
- EIOPA’s view is that not all NCAs have sufficient powers to conduct effective business supervision.