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January 19, 2018

FCA published the policy statement PS18/1, which sets out response to the feedback received to third consultation paper, CP17/33, on the Insurance Distribution Directive (IDD). PS18/1 also covers feedback on certain matters deferred from the second consultation paper CP17/23; feedback to the IDD-related aspects of two quarterly consultation papers, CP17/32 and CP17/39; and the potential for the IDD application date to be delayed.

PS18/1 is intended for insurance and reinsurance companies, intermediaries, other firms and customers in the insurance market, and bodies representing these groups. It is also expected to be of interest to the designated professional bodies and their members. PS18/1 summarizes the following:

  • FCA's approach to the IDD delegated acts
  • Changes to the requirements related to the distribution of IBIPs and wider life insurance business, such as, inducements; suitability and appropriateness; and information and product disclosure
  • Changes to the rules to implement requirements in the IDD that apply to life and non-investment insurance business, including conflicts of interest; product oversight and governance; Perimeter Guidance; regulatory processes
  • Additional changes to the Handbook
  • Feedback to quarterly consultations CP17/32 and CP17/39

On December 20, 2017, EC proposed delaying the application date of the IDD to October 01, 2018. The European Parliament and the Council will need to agree on the new application date before the delay is formally adopted and published in the Official Journal of the European Union. Under this proposal, firms would have until October 01, 2018 to implement the new IDD requirements. FCA intends to publish final rules once the Treasury’s legislation is in force. Firms affected by these rules will need to ensure compliance by the application date specified in these final rules, depending on the outcome of the proposed delay. The IDD replaces the Insurance Mediation Directive (IMD) and aims to enhance consumer protection when buying insurance (including non-investment insurance, life insurance, and insurance-based investment products or IBIPs). 


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Keywords: Europe, UK, Insurance, IDD, PS18/1, CP17/33, FCA

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