New insurance distribution regulation

Insurance Distribution Directive (IDD)

IDD is to be transposed by 23 February 2018 and is applicable to all insurance distributors.


On 2 February 2016, the Insurance Distribution Directive (Directive 2016/97/EU) (IDD) was published in the Official Journal of the European Union.

The IDD replaces the 2002 Insurance Mediation Directive (Directive 2002/92/EC) (IMD). It must be transposed in the Members States by 23 February 2018. The provisions of the IDD are somewhat similar to its predecessor the IMD, but the breadth and depth of application means that it could have a broader impact on all firms that sell insurance products.


Why was the IDD introduced?

The IDD was introduced to address deficiencies in the IMD and, like its predecessor, is a minimum harmonisation directive. This means that the provisions can be gold plated by EU Member States. The IDD is broad in scope and applies to the distribution of both insurance and reinsurance products.

It affects all sellers of insurance products and insurance undertakings that sell insurance directly to customers. This includes aggregators and online insurance retailers. It will also apply to anyone whose activities include assisting in the administration and performance of a contract of insurance such as loss adjusters and claims managers.

This broad scope means that some distributors and administrators of insurance products are facing a suite of new regulations that they will need to prepare for.


  • EU-wide minimum harmonisation
  • Strengthening consumer protection
  • Identifying and avoiding conflicts of interest
  • Introducing distribution channel standards
  • A level playing field for different distribution channels

Affected companies

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In order to guarantee that the same level of protection applies regardless of the channel through which customers buy an insurance product, either directly from an insurance undertaking or indirectly from an intermediary, the scope of this Directive needs to cover not only insurance undertakings or intermediaries, but also other market participants who sell insurance products on an ancillary basis, such as travel agents and car rental companies, unless they meet the conditions for exemption.



How IDD will impact your organisation?


Subjects Requirements IDD



General requirements

  • Scope
  • Professional and organizational requirements
  • Compensation
  • Sanctions and measures
Product governance
  • Product Governance manufacturer
  • Product Governance distribution
  • Cross-selling
Distribution / Marketing
  • General Information
  • Conflict of Interest
  • Distribution Standards
  • Insurance investment product information
    (Ex ante cost reporting)
  • Inducements
    Insurance investment products
  • Distribution of insurance investment
    products, with advice
  • Distribution of insurance investment
    products, without advice
Reporting obligations insurance-based investment products
  • Periodic suitability statement
  • Ex post product reporting
  • Ex post cost reporting




Non-compliance with IDD can have significant negative consequences

Personal liability for management and supervisory bodies (for legal entities).


Financial penalties against legal entities:

At least 5,000,000 euros or up to five percent of the total annual turnover.

Publication of the type and nature of the breach and the identity of persons responsible for it.


Financial penalties against natural persons:

At least 700,000 euros or up to twice the amount of the profits gained or losses avoided because of the breach.

Ban on the exercise of a management function in insurance intermediaries or undertakings for any members of the management body who are held responsible.


Damage for the falsely issued KIDs (PRIIPS)

What do I need to do?

Insurance firms affected by the IDD will need to ensure that they can comply with the IDD’s obligations. Those operating under current IMD exemptions will need to revisit their business operations to ensure that they are still exempt under the IDD.


Get in touch with us

Contact us

Géraldine D'Argembeau

Géraldine D'Argembeau

Partner Risk & Compliance, PwC Belgium

Tel: +32 476 47 19 59

Connect with PwC Belgium