The European Commission has confirmed plans for insurance companies to be included within the insurance mediation directive.
In an IMD consultation paper, released last week, the EC says the move is needed to create a level playing field. The idea was first floated during the consultation on Solvency II.
The paper says : “The current IMD does not guarantee a real level playing field between all participants involved in the selling of insurance products because it directly exempts insurance undertakings (direct writers) and their employees from its scope. As a result, policyholders may receive less information and protection.”
It says it appears “logical” that insurance companies should face similar requirements when distributing insurance policies.
The consultation is looking at other problem areas in the 2005 IMD, such as quality of information, lack of clarity over conflict of interest rules and the possible introduction of remuneration disclosure.
Under current arrangements, member states are free to design their own remuneration requirements, leading to a range of national standards, but the paper says the financial crisis has highlighted the need for more comprehensive information and transparency in this context.
Another issue is the “unclear wording” and resulting confusion on disclosure and conflicts of interest.
The paper says: “The current wording of the directive is unclear in relation to conflict of interest and transparency rules. In order to avoid misleading customers, effective rules on conflict of interests should be introduced.”