Committee throws weight behind UK arrangements as model for Europe
European regulators have weighed in to support the UK’s arrangements on commission disclosure as the way forward.
In its advice to the European Commission on the soon to be updated Insurance Mediation Directive (IMD), Ceiops (the Committee of European Insurance and Pensions Supervisors) backed the system that operates in the UK under which commission is disclosed on request.
The Commission is due to publish its draft IMD2, which will provide the framework for the regulation of insurance broking across the EU, as early as next week. A final version is expected to go before the European Parliament for ratification in the spring.
Ceiops’ advice is not binding on the Commission, but carries weight because it represents the views of industry regulators from across the EU’s 27 member states.
Ceiops said: “The majority of members regard an ‘on request’ regime as a minimum harmonisation regime, maintaining the possibility for member states to impose stricter requirements as the best possible solution to the improvement of the transparency of remuneration.”
Ceiops has said that intermediaries should be obliged to notify customers of their right to request information about levels of commission before contracts are concluded or amended.
Biba’s head of compliance and training, Steve White, said the association was “comfortable” with Ceiops’ approach. “Ceiops has come out where we would like the financial solution to come out, but clearly we want to see which way the Commission is heading.”
Ceiops was nearly four months late delivering its advice on the IMD to the European Commission, a delay caused by disagreements between southern and northern European member states over commission disclosure.
The FSA tried to introduce mandatory commission disclosure last year, before consenting to the industry’s voluntary regime of disclosure on request.