Understanding the Insurance Distribution Directive

What is the primary purpose of the Insurance Distribution Directive (IDD)?

• To increase insurance company profits

• To enhance consumer protection and harmonise insurance distribution across the EU

• To reduce the number of insurance providers

• To eliminate all insurance intermediaries

What are the main areas covered by the IDD Directive? (Multiple answers possible)

• Product Oversight and Governance (POG)

• Conflict of interest

• Professional training and competence

• Client information and conduct of business

• Suitability assessment

A bank can be an ancillary insurance intermediary.

• True

• False

The IDD Directive provides for maximum harmonisation between EU Member States.

• True

• False

What is the main objective of insurance product governance under the IDD?

• To maximise sales at any cost

• To ensure products are designed to meet the needs of identified target markets

• To allow only one type of insurance product per company

• To reduce the number of insurance claims

Which of the following is NOT considered a distribution channel under the IDD?

• Direct sales by insurers

• Insurance brokers

• Comparison websites

• Asset Managers

According to the IDD, what must insurance distributors do regarding conflicts of interest? (Multiple answers possible)

• Ignore them

• If they cannot be avoided, disclose and manage them to protect the customer

• Try to avoid them as much as possible

• Only inform the regulator, not the customer

The IDD Directive (2016/97/EU) replaces the IMD Directive (2002/92/EC).

• True

• False

What training requirement does the IDD impose on insurance distributors?

• No training is required

• At least 15 hours of professional training and development per year

• Only managers must be trained

• Training is required only once every five years

What are General Good Rules in the context of IDD? (Multiple answers possible)

• National rules aimed at protecting the general interest of local customers

• Harmonised European rules identical in each Member State

• Additional requirements imposed by a Member State for consumer protection reasons

• Rules applicable only to life insurance products

• Rules that may address advertising, intermediary conduct rules or extra disclosure requirements to clients.