Key vote on progression of the directive postponed so other regulations can be considered
The Insurance Mediation Directive II (IMD II) has been hit by further delays as the European Parliament vote is postponed.
The European Parliament had been expected to pass the directive moving it on to the next stage of the negotiating process.
However, the European Parliament now wants the recast of the directive to be considered alongside revisions to the Markets in Financial Instruments Directive (MiFID2) and Key Information Documents Directive (KID) that will apply to all investment products.
This means that the timescales for progression of the directive remain unclear.
KPMG insurance partner Jane Portas said that brokers would be looking for clarity on the issue so Europe will be brought into line with regulations in the UK as soon as possible.
“The market is keen that we land a position on it, so it is important to get clarity,” she said. “A lot of the amendments for IMD II are things that are already in bills in the UK regulatory framework. But across Europe this will have quite a significant impact.”
The wording in its current form will require brokers across Europe, as well as insurers and aggregators, to disclose commission upon request. While this is currently the requirements for brokers in the UK, it is not the case for insurers, aggregators or continental brokers.
Portas said that when the revision comes in it will create a more level playing field for brokers across Europe.
“The sooner we can get commonality of approach the better,” she said. “Commonality of apporach across finaincial services, insurance, intermediation as well as commonality of approach across Europe is going to be important.
“For those [brokers] that are operating on a cross-borders basis, having that clarity as to what is going to be required of them in the different territories and how how the different supervisors interact is key. All of that is addressed in this directive.”