NFU News

Hearing on the IDD Guidelines

On the 23rd of September EIOPA (European Insurance and occupational pensions authority) held a public hearing in Frankfurt on the new proposed guidelines for insurance sales in Europe.

The Insurance Distribution Directive is the directive from the European Commission that aims to give European consumers greater choice and information when they buy insurance products. The directive and guidelines will enter into force in February 2018. EIOPA therefore gave the chance for stakeholders to give their input on the proposed guidelines before they will hand in their technical advice to the Commission in early 2017.

It became clear during the hearing that it will be a challenge for EIOPA to find common ground between the member states. Some countries have stricter regulations on whom are able to sell insurance products, others countries have intermediates as their main source of insurance distributers.

NFU has previously given our input on the issue, successfully influencing the directive. One of NFU’s main concerns is the risk of creating additional administrative burden. Employees must be given sufficient time and adequate training to be able to translate these guidelines into their working routines.

With concerns to sustainability and reporting it is also crucial that excessive record keeping will not affect employees in a negative way. The guidelines must provide such provisions that for example excessive performance measurement systems do not lead to poor advice.  NFU will continue to emphasise this to the European Supervision Authorities.

The public hearing also addressed the issue of conflict of interests and inducements.  This only applies to third party payments.  The IDD requires that the sales person informs the customer on whether he or she receives variable pay based on the sales made.  NFU believes that there is a need for more transparency but it should not interfere with the integrity of each employee.  How an employee is paid, either by fixed or variable pay, should be an issue for the employer, the employee and his or her trade union. The EU should as a general rule not regulate pay as that interferes with the right of collective bargaining.

The deadline to respond to the consultation is on the 3rd of October.

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