Insurance Distribution Directive (IDD) Update from Assurant
The new Insurance Distribution Directive (IDD) comes into effect on 1st October 2018 and is a replacement for the current Insurance Mediation Directive (IMD). The purpose of this new directive is to:
· Enhance consumer protection when they buy insurance.
· Standardise the information the customer receives and when they receive it.
· Introduce the same enhanced minimum rules in every European country to ensure the way insurance is sold and administered is very similar.
There are several areas that will impact immediately such as providers sending IPIDs (Insurance Product Information Document) for any policies that are due to renew from 1st October 2018 and advisers giving IPIDs for any new business they know will commence from 1st October 2018.
Some key areas to note:
· IPIDs will replace the current policy summary (Key Facts) document and are designed to be a clearer and simplified document with specific sales information in a set format.
· Demands & Needs Statements (suitability letters) will need more detail from the selling agent to the client such as the importance of specifying the needs the client has requested, as well as specifying those requirements the customer requested that couldn’t be met by the product offered.
· Remuneration Statements must inform customers of the nature of remuneration they receive from the sale of any insurance products (you must inform of the nature, not the amount of commission received) and that your remuneration should not create any conflicts of interest against the advice you give to your clients.
· Adviser firms also need to be clear that they state how insurance is offered and through which providers.
· A minimum level of related CPD hours is also required per year.
Here are some of the key points that we have been working on to help GI writers using our platform:
· Assurant have implemented individual IPID’s for each of our products – https://www.assurantforadvisers.co.uk/products-and-insurers/ – and we will be sending these documents in all New Business and Renewal packs that come into effect from 1st October.
· Through Quoforma+ we already offer you templates for both Advised and Non-Advised demands and will soon provide more comprehensive and dynamic documents to give you the additional content that advisers need under the new directive.
· We will also include a statement within our new Demands and Needs templates informing the customer that the seller will receive a commission as a percentage of the overall premium.
For more information on IDD, visit the FCA website – https://www.fca.org.uk/firms/insurance-distribution-directive or contact Assurant.
This communication was provided by Assurant.