Insurance Mediation Directive 2: A Step to Ever Closer Union in the EU?
- On 3 July 2012, the EU Commission published draft amendments to EU Directive 2002/92EC on insurance mediation which currently regulates the sale of insurance products in the EU. The draft amendments are known as IMD2.
- The new rules would apply to all sellers of insurance products, including, for the first time, insurance companies that sell insurance directly to consumers in the EU. This would include persons who sell such products on an ancillary basis such as leasing and car rental companies. Subject to certain exceptions, it would also apply to price comparison websites, claims managers and loss adjusters.
- The draft IMD2 sets out strict remuneration disclosure requirements and conduct of business rules in respect of intermediaries. It envisages a "full disclosure" regime for the sale of life insurance products and an "on-request" regime (i.e. on the consumer's demand) for the sale of non-life products with a transitional period of five years. After the expiry of the five year transitional period the full disclosure regime would automatically apply to the sale of non-life products as well. The draft IMD2 provides for new disclosure requirements in respect of insurance products with an investment element and imposes a general requirement for intermediaries to act in the best interests of their client.