PS17/21: Insurance Distribution Directive implementation – Feedback to CP17/7 and near-final rules

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Policy Statement

This is our first Policy Statement setting out our near final rules for our implementation of the Insurance Distribution Directive (IDD).

Show PS17/21 (PDF)

This Policy Statement sets out our near final rules based on the feedback we received to CP17/7. It covers:

  • the scope and application of the IDD, including the regimes for ancillary insurance intermediaries
  • professional, organisational and prudential requirements for insurance distributors
  • complaints and out-of-court redress
  • conduct of non-investment insurance and pure protection business

Who this applies to

This Policy Statement will affect a large number of firms we authorise, as well as some firms who are exempt from authorisation. The types of firms affected will be:

  • insurance brokers
  • reinsurance brokers
  • managing general agents
  • insurers
  • reinsurers
  • professional firms involved in insurance business (both authorised and exempt)
  • appointed representatives who conduct insurance business
  • ancillary insurance intermediaries (including those excluded from regulation through the connected contracts exclusion)

Consumers have a clear interest in financial markets that operate fairly and transparently, which is the rationale for the proposals in this CP. Some of the subjects covered, including the conduct of business rules, will be of significant interest to consumers.

Next steps

The European Commission (the Commission) has proposed a delay to the application date of the IDD to 1 October 2018. This proposal is currently under consideration by the European Parliament and European Council.

In order to provide certainty for industry, Her Majesty’s Treasury has announced that the government will delay transposing the IDD into UK law until the outcome of this proposal has been confirmed. This is expected to be after 23 February 2018, the original application date of the directive.

Therefore, once the IDD is transposed into UK law we will make our final rules – these were published in near-final form on 19 January 2018 (as we said in PS18/1, we do not expect to make any changes to the near-final rules). Firms will then be required to comply with our final rules from whatever date is ultimately agreed at European level as the application date of the directive - under the current proposal from the Commission, this date would be 1 October 2018.