Insurance Mediation Directive
We have had discussions with the FSA in regard to the European Commission’s thinking concerning the revision of the European Insurance Mediation Directive (IMD is the European Parliament and Council Directive of December 2002 on insurance mediation) and relevant work. This is a topic that we have been keeping a watching brief over the developments.
While the Panel appreciates that the FSA can not regulate to a standard below that specified in the IMD and that the revisions to the Insurance Conduct of Business (ICOB Handbook) regime were helpful given that restriction, the IMD creates an artificial and unhelpful distinction between intermediated and direct business and puts an unreasonable additional burden on intermediaries.
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What the SBPP has said previously on this topic:
Throughout this process the Panel expressed concern that the FSA had chosen to retain the (super equivalent) rule relating to cancellation rights for non-distanced sales to retail customers. This rule creates particular problems of abuse in relation to motor insurance which adversely affects smaller intermediaries trading in high street locations.
The Panel, on behalf of smaller intermediary firms, expressed concern that the FSA’s framework, while permitted under the terms of the IMD, created an unfair playing field to the advantage of direct insurers and to the detriment of intermediaries. In consequence the Panel has urged the FSA and the Treasury, as it has done on various occasions in the past, to press the European Commission for an early review of the IMD.