Transposition of the Insurance Distribution Directive

The Insurance Distribution Directive (IDD) entered into force on 23 February 2016, and must be transposed into national law by 23 February 2018. On 23 June, the EU referendum took place and the people of the United Kingdom voted to leave the European Union. Until exit negotiations are concluded, the UK remains a full member of the European Union and all the rights and obligations of EU membership remain in force. During this period the Government will continue to negotiate, implement and apply EU legislation. The outcome of these negotiations will determine what arrangements apply in relation to EU legislation in future once the UK has left the EU. In line with this policy the government intends to transpose and implement IDD to schedule.

IDD replaces the Insurance Mediation Directive (IMD) which introduced specific minimum standards for the mediation of insurance contracts (principally brokering). IDD extends these minimum standards to cover the direct sale of insurance products by insurers, as well as seeking to more broadly improve consumer protection.

This consultation document sets out the government’s intended approach to transposing IDD into UK law, and views are invited on these proposals. As IDD is a minimum harmonising directive the government has the option of introducing additional provisions or bringing additional activities into the scope of regulation as appropriate for the UK market. Where the government has done this previously, this consultation invites comment from respondents on the appropriateness of continuing to do so.

The government also invites comments on proposed legislative changes to implement IDD and give effect to the government’s proposals.