The Insurance Mediation Directive revision (IMD 2) entered its active parliamentary phase about three months ago, and its schedule is already suffering delays of several months, shifting from May to July for its final adoption.
Over this period, FERMA will continue to press its view strongly for changes to the directive to provide greater protection for the corporate insurance customer.
As the draft currently stands, only individual policyholders and small businesses will be automatically entitled to disclosure of their intermediary’s remuneration. Buyers of insurance for large risks and the new category of professional customers are excluded from enforceable transparency.
Until the vote in plenary session, the Parliamentary Economic and Monetary Affairs committee (ECON) is responsible for carrying on with IMD 2, with the help of its appointed rapporteur German MEP Werner Langen. Of course, other committees are involved, but for opinions only. One of them is the Internal Market and Consumers Affairs committee (IMCO), which held one of its monthly sessions on 20 February.
This meeting clearly showed how difficult it is for the parliamentary committees involved to reach a reasonable compromise, even among their own members. There are clear divisions between MEPs on remuneration and transparency of insurance intermediation.
IMCO has a specific focus on consumer protection and believes that the ECON draft report and its numerous amendments to the original Commission proposal are widely unsatisfactory. It would have liked to share the lead with ECON on the IMD 2 case, and cooperation between the two committees is not really smooth.
The rapporteur for IMCO, British MEP Catherine Stilher, has asked to postpone the adoption of her report by the committee, initially planned for 4 March. One reason is to have time to build stronger agreement among IMCO members in order to have more influence over the ECON debates. The second is to shift adoption until immediately before the ECON vote, now scheduled for 27 May, again with the aim of increasing its effect.
At this stage, nothing much has been done, either in IMCO or ECON, to reinstate the on-request disclosure possibility for the so-called professional customer, a major innovation introduced by IMD 2 but removed by the draft report presented in ECON.
In a nutshell
Directive: Insurance Mediation Directive 2 (IMD 2)
Current status: With the Parliamentary Economic and Monetary Affairs committee (ECON)
Next vote: ECON 27 May
Final adoption by Parliament: July
National associations are continuing to strengthen market transparency ahead of the final adoption of IMD 2. At its annual conference, Les Rencontres, in February the French association AMRAE signed a charter with the brokers’ association CSCA and insurance association FFSA to formalise good practices in risk transfer. This latest pact updates previous market agreements which began in 2006.
In Poland, POLRISK President, Slawomir Pijanowski says that he hopes to start discussions regarding good practices of risk transfer and alternative risk transfer on a country level with local stakeholders during this year.
He comments, “POLRISK decided to support FERMA’s position on IMD 2 mainly due to the fact that in 2010, FERMA and the European intermediaries’ association BIPAR reached agreement on disclosure of brokers’ remuneration, which was acceptable and reasonable for both sides of the market. We as POLRISK always support dialogue. There should be a balance of interests, also taking into account concerns of intermediaries and not only our own as risk managers.”