The insurance distribution directive is legislation which sets rules and regulation. Which is required for a firm in order to sell insurance products. IDD (insurance distribution directive) replaces with the IMD( insurance mediation directive.)
IDD is also similar to IMD, it covers all aspect which is required in the process for the same. All aspects are included in it like passports, authorization intermediaries and so on. IDD’s main aim is to enhance the security of the consumer while purchasing or entering in insurance contracts.
Guidelines(insurance distribution directive)
There are guidlines for the same that you must be read carefully. These are as follow-
- According to article 16 of the European Parliament and of the Council. (European Insurance and Occupational Pensions Authority) Issuing guidelines for the assessment of the insurance. That makes difficult for the consumer to understand or difficult to analyze whether the risk is involved or not. Similarly, in other words, the assessment of insurance based investment is being classified in another section. That is non-complex for the same purpose to make it difficult for the customer. To find out whether the risk involved or not.
There is some requirement that is supposed to be applied to those contract which is regarding investment exposure.
The insurance intermediary must have to ensure that the insurance should be based on investment exposure to the financial instruments. Deemed non-complex under Directive 2014/65/EU.
Identified are in article 25(4)(a) just click on this link this will redirect you to the complete guidance page. You could simply read all the important segments and all complete guidelines on a form of pdf https://eiopa.europa.eu/Publications/Guidelines/EIOPA-17-651-IDD_guidelines_execution_only_EN.pdf