On the 3rd of July, 2012, the European Commission adopted a proposal for the revision of the Insurance Mediation Directive (“IMD”) which is part of a wider legislative package focusing on consumer protection related issues. Indeed the proposed directive seeks to improve regulation in the retail insurance market in an efficient manner by creating common standards and therefore a level playing field across insurance sales and ensuring proper advice.
The proposed new provisions include the following:
- a general requirement for intermediaries to act in the best interest of their client;
- a requirement to disclose specific information with respect the remuneration by the intermediary;
- with respect to insurance products offered as part of a bundled package, an obligation to inform the consumer that the elements of the package may be purchased separately and to provide an itemised price list for the components;
- an obligation to give the consumer, prior to entry into the contract, sufficient information about the insurance product to allow him to make an informed decision;
- the obligation to fully disclose and clearly present to consumers all information regarding insurance products with investment elements.
The Commission anticipates that the revised IMD will give rise to increased consumer protection standards, which would result in increased consumer protection and it hopes that it will facilitate the operation by insurance intermediaries on a cross-border basis throughout the European Union.
Subject to its adoption by the European Parliament and the European Council and the agreement upon various technical measures, it is anticipated that the revised IMD will enter into force in 2015.