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France and Germany are ignoring the IMD

EU in ultimatum to 10 countries snubbing the directive which has cost British IFAs millions

The European Commission is pursuing 10 countries which have failed to enforce the insurance mediation directive after UK firms have spent millions of pounds on imp- lementation.

The EU has sent reasonable opinions – demands that the directive be enforced – to 10 countries, including France, Italy, Germany and Spain, after the countries failed to respond to a formal notice in March.

If the countries fail to make a satisfactory reply within the next two months, the EC can refer the matter to the European Court of Justice. The failure to implement the IMD, which regulates insurance contracts, delays progress towards the single market where firms can sell their products throughout the EU.

UK IFAs suffered financial hardship complying with the directive’s demand that all firms carry 1.1m in PI cover.

EC Internal market and services commissioner Charlie McCreevy says: “When a directive is not implemen- ted across all member states, citizens and businesses across Europe are denied the full benefit of the single market and measures that their governments have agreed.”

Personal Finance Society public affairs director John Ellis says: “IFAs in the UK will understandably be resentful of other countries that are not implementing the IMD because they have had to spend time and money complying with it.”

Cardiff Pinnacle deputy head of risk Keith Martin says: “Intermediaries in the countries that have complied may have incurred costs and complexity that those in the other major insurance markets, such as France, Germany and Italy, have not.”

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