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New Insurance Distribution Directive application deadline announced

15 February 2018

EU ambassadors confirmed yesterday that new dates for the transposition and application deadlines for the Insurance Distribution Directive (the Directive) had been agreed following the European Commission’s proposal to delay them in 2017. Following this proposal the new date for transposition is now 1 July 2018 with the application deadline to be 1 October 2018.

The European Parliament and the Council are not expected to adopt the amending directive before March 2018 therefore the delay will apply retroactively from 23 February 2018, the original deadline for application of the Directive. In practice, this means the delayed timetable will apply from 23 February 2018, regardless of the fact that it will be legally adopted in March 2018.

The Directive seeks to improve retail insurance rules in a manner that will facilitate market integration, establish the conditions necessary for fair competition between distributors of insurance products; and strengthen policy holder protection.

At the time of proposal, the industry broadly welcomed the delay. It is envisaged that the delay will enable the industry to better prepared for the Directive and provides an appropriate amount of time to properly implement the requirements and comply with the rules, which were issued in September 2017.

Going forward, it is extremely important that that insurers and distributors make clear plans for the implementation of the Directive as the 1 October 2018 is only eight months away.

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