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December 20, 2017

EC published the Commission Delegated Regulations (EU) 2017/2358 and 2017/2359, which supplement the Insurance Distribution Directive (IDD: Directive (EU) 2016/97). Regulation (EU) 2017/2358 covers product oversight and governance requirements for insurance undertakings and insurance distributors while Regulation (EU) 2017/2359 covers information requirements and conduct of business rules applicable to the distribution of insurance-based investment products (IBIPs). Both the regulations shall enter into force on the twentieth day following that of their publication in the Official Journal of the European Union and shall apply from February 23, 2018.

IDD provides for a set of standards aimed at addressing IBIPs, in addition to the conduct of business standards laid down for all insurance products. CDR 2017/2358 lays down rules for the maintenance, operation, and review of product oversight and governance arrangements for insurance products; it also sets out rules for significant adaptations to the existing insurance products, before those products are brought to the market or distributed to customers (product approval process), in addition to the rules for product distribution arrangements for those insurance products. This regulation shall apply to insurance undertakings and to insurance intermediaries that manufacture insurance products that are offered for sale to customers (manufacturers) as well as to insurance distributors that advise on, or propose, insurance products that they do not manufacture.

CDR 2017/2359 shall apply to insurance distribution in relation to the sale of IBIPs carried out by insurance intermediaries or insurance undertakings. To ensure an appropriate standard of advice with regard to the long-term development of the product, insurance intermediaries or insurance undertakings should include, in the suitability statement, and draw customer attention to, information on whether the recommended IBIPs are likely to require the customer to seek a periodic review of their arrangement. To allow competent authorities and insurance professionals to adapt to the new requirements contained in Regulations 2017/2358 and 2017/2359, the starting date of application of the regulations should be aligned with the entry into application of the national measures transposing IDD. 

 

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Effective Date: January 09, 2018

Keywords: Europe, EU, Insurance, IDD, CDR 2017/2358, CDR 2017/2359, IBIP, EC

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