European Commission seeks to postpone IDD until October 2018

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New proposals could see seven month delay.

The European Commission has proposed pushing back the application date of the Insurance Distribution Directive (IDD) by seven months to 1 October 2018.

However it highlighted that EU countries were still required to bring the IDD, which will further regulate how insurance is sold, into national law by the original date of 23 February 2018.

The Commission added that the European Parliament and the Council will need to agree on the new application date “in an accelerated legislative procedure”.

Relieved
Mathew Rutter, insurance advisory partner at law firm DAC Beachcroft commented: “Insurers and intermediaries will be relieved at this announcement, as it had been obvious for the some months that the deadline of 23 February 2018 was unrealistic, especially given the uncertainty about some aspects of IDD and how it is intended to operate.

“However, there is still a process to be followed by the European Parliament and the Council before this becomes law, so this leaves firms in a state of limbo.”

He argued that it would be helpful for the Financial Conduct Authority (FCA) and regulators in other member states to make it clear now that they will not expect firms to be compliant with the new rules until 1 October 2018, however long it takes the European bodies to formally reflect that in law.

Interpretation
Rutter concluded: “Also, the FCA and other regulators will still need to make their rules by the original deadline of 23 February 2018.

“But let’s hope that they are still open to reviewing their interpretation of the rules after that date.”

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