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IPID drafting services

The Insurance Distribution Directive (IDD) imposes an obligation on all insurance distributors to supply an Insurance Product Information Document (IPID) prior to inception of all non-commercial policies policies incepting on or after the implementation date (which was originally scheduled for 23 February 2018, but has been delayed until a date to be confirmed by the Treasury).

What is an IPID?

The IPID is a standard form document that contains standard information about a policy. Article 20(1) of the IDD states that the IPID is to provide ‘objective information about the insurance product in a comprehensible form’, so that the policyholder can make an informed decision on the product best suited to them. The format they will take should allow policyholders to easily compare different products side-by-side.

What does an IPID look like?

The IPID will be delivered in a prescribed template incorporating the symbols shown below:

Image 1

 What is insured?

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  What is not insured?

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  Are there any restrictions on cover?

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   Where am I covered?

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  What are my obligations?

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  When and how do I pay?

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  When does the cover start and end?
img 8   How do I cancel the contract?
 

What do you need to do next?

The IDD imposes an obligation on distributors to provide an IPID to all non-commercial policyholders prior to the sale being formalised. Although the obligation to supply the IPID falls upon the distributor, obligation to produce the IPID lies with the manufacturer.
 
The first step therefore is to identify whether you are the manufacturer or distributor of any non-commercial policies (you could be both or neither).
 
For manufacturers, you must prepare IPIDs for each of your products in the form of the template and taking into account the requirements below.
 

Article 20(7) Insurance Distribution Directive

Article 20(7) dictates the requirements of the IPID. It must:
  1. be a short and stand-alone document;
  2. be presented and laid out in a way that is clear and easy to read, using characters of a readable size;
  3. be no less comprehensible in the event that, having been originally produced in colour, it is printed or photocopied in black and white;
  4. be written in the official languages, or in one of the official languages, used in the part of the Member State where the insurance product is offered or, if agreed by the consumer and the distributor, in another language;
  5. be accurate and not misleading;
  6. contain the title ‘insurance product information document’ at the top of the first page;
  7. include a statement that complete pre-contractual and contractual information on the product is provided in other documents.

Article 20(8) Insurance Distribution Directive

Article 20(8) dictates the content for the IPID. It shall:

  1. information about the type of insurance
  2. a summary of the insurance cover, including the main risks insured, the insured sum and, where applicable, the geographical scope and a summary of the excluded risks;
  3. the means of payment of premiums and the duration of payments;
  4. main exclusions where claims cannot be made;
  5. obligations at the start of the contract;
  6. obligations during the term of the contract;
  7. obligations in the event that a claim is made;
  8. the term of the contract including the start and end dates of the contract;
  9. the means of terminating the contract

Owing to the constraints of the format of the IPID, together with its 2 page limit, in most cases manufacturers will be required to make a judgement call as to what to include and what to leave out. It is key to record and document the rationale for what is included and what not included in the IPID, ideally by reference to objective criteria, such as claims and complaints data.

Browne Jacobson IPID drafting service

Here at Browne Jacobson we are working closely with insurers and intermediaries on determining their obligations, producing IPIDs and recording the rationale for their contents. In most cases, we are able to provide our advice and draft IPIDs on a fixed fee basis.

Should you have any queries or require any help with your own IPID requirements please contact Tim Johnson (tim.johnson@brownejacobson.com; 0115 976 6557).