How the end customer benefits from IDD and what matters
In our last blog article about the Insurance Distribution Directive (IDD) we have described how you can make the provision of information IDD-compliant. The IDD increases transparency since insurance intermediaries are now obliged to provide the customers with the mandatory information prior to the conclusion of the contract. The relevant information is required in a timely manner, easy and in an understandable language and must be provided completely. Accordingly, the IDD strengthens the position of the customer.
The implementation of the required information on your website is easier than expected if you have the necessary know how.
Concrete information obligations due to the IDD increases transparency for the customer
Firstly, the disclosure of interests in accordance with the text of the regulation:
Basically business documents must clearly show in the header or footer the following information with regard to the insurance intermediary (Article 14, 18, 19 EU Directive (EU) 2016/97, § 1 Abs. 4, Abs. 5, Abs. 8 der VO-Standesregeln):
- Identity, address, register number.
- Disclosure of status.
- All agency agreements.
- If the insurance intermediary is entitled to receive premiums, the insurance intermediary shall also give the relevant information.
Furthermore, the insurance intermediary shall provide the customer with at least the following information prior to the (online-) conclusion of the insurance contract (clicking the order button):
- Its identity and address and the fact that it is an insurance intermediary;
- Whether it provides advice about the insurance products sold;
- The procedures referred to in § 365 z1 GewO 1994;
- The register in which it has been included and the means for verifying that it has been registered;
- Whether the intermediary is representing the customer or is acting for and on behalf of the insurance undertaking (agent) or as a broker;
- Whether it has a holding, direct or indirect, representing 10 % or more of the voting rights or of the capital in a given insurance undertaking;
- Whether a given insurance undertaking or parent undertaking of a given insurance undertaking has a holding, direct or indirect, representing 10 % or more of the voting rights or of the capital in the insurance intermediary;
- The disclosure of the insurance intermediaries’ relation to the insurance undertakings;
- The nature of the remuneration received in relation to the insurance contract;
A document including all the above listed information must be provided to client in good time before the conclusion of the contract. We suggest providing the information via “a forced download”. Accordingly, the client can only proceed the customer journey after opening and at least reading this obligatory information.
To sum it up: an IDD-compliant insurance distribution provides all this information in a verifiable way. Regardless of the sales channel you choose, make sure all your actions take this transparency in favour of the client into account.
Find all related IDD-articles here.