4 July 2012 Insurance

Concerns over Insurance Mediation Directive

European Commission proposals that aim to improve consumer protection pose significant challenges for providers and distributors in the insurance market, according to several industry groups.

The Commission’s Insurance Mediation Directive (IMD II) proposals are designed to level the playing field for the sale and disclosure of insurance and strengthen consumer protection.

David Strachan, co-head of the Deloitte Centre for Regulatory Strategy, said that while IMD II remuneration disclosure requirements aim to address potential conflicts of interest across sales channels, remuneration related to direct and intermediated insurance sales are different, and vary depending on the service.

“Ensuring that consumers understand the context in which disclosures are made, and can make use of this information, will be important to avoid undermining the Commission’s objective of a level playing field,” he said.

The British Insurance Brokers’ Association (BIBA) has also expressed concerns. Steve White, head of compliance and training at BIBA, said: "Our primary concern is around mandatory disclosure and where it is imperative from a European perspective that a level playing field is established with insurers when selling direct.”

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