A proposal to delay the implementation date of new legislation that affects how firms sell insurance products does not mean that dealers should relax their steps to comply, says The Warranty Group.
The Insurance Distribution Directive (IDD) remains due to come into effect on February 23. However, the European Commission has announced a proposal to push back its application date until October 1, relaxing the need to comply.
The IDD is EU legislation affecting insurance distributors that aims to improve consumer protection and further harmonise how insurance distribution is regulated across Europe.
Key points include:
- Professional training requirements for staff involved in insurance distribution
- Enhanced product information and disclosure requirements help customers make informed decisions.
- Distribution of insurance, including regulated motor products (GAP and breakdown cover).
The Warranty Groups chief executive for UK and Europe, Rich Green (pictured), said: “The proposal of an extra seven months to comply with IDD is good news for dealers, providing some extra breathing space at a busy time for new legislation.
“In fact, not only will it allow firms to make sure that all the necessary changes are properly considered, designed and tested but another key advantage of the additional time, we believe, is that it will allow dealers to implement IDD and GDPR-compliant processes as part of the same reviews, because the timings are so similar.
“However, in our view, it certainly does not mean that dealers can relax in their efforts to accommodate IDD. This is an important piece of legislation that has key implications for their businesses.”
Green explained that IDD is about increasing standards across the insurance industry to ensure that customers are provided with clear and meaningful information about insurance and the firms providing it.
“As a business that puts the customer first, we very much welcome its arrival. However, it does create the need for us to modify the infrastructure within which we operate when it comes to dealers and their customers.
“Over the last few months, we have been working hard on preparations and we now have a complete initiative in place that is designed to help take these partners through the required process as easily as possible.
“We view providing this support as an important part of our role as a major warranty provider in the motor sector that works with everyone from the world’s largest car manufacturers to small independent dealers.”
“We are confident that we are well-positioned to ‘walk’ our partners of all sizes through the process of IDD compliance.
"However, even with the proposed extension, there will still just be seven months for firms to comply, so there is a need for a concerted course of action.”