The Insurance Distribution Directive (IDD) regulates how insurance products are designed and distributed in the European Union. It entered into force on 23 February 2016. The IDD is a minimum harmonising directive, allowing Member States to introduce additional provisions or to bring additional activities into the scope of the regulations. The rules of the IDD apply to the distribution of all insurance products. It has more prescriptive rules for distributors offering insurance products that have an investment element (IBIPs).
The IDD sets out the information to be given to consumers before they sign an insurance contract. It also imposes conduct of business and transparency rules on distributors, introduces procedures and rules for cross-border business and lay down rules for the supervision and sanctioning of insurance distributors that do not comply with the IDD.
The Directive empowers the European Commission to adopt technical rules (Delegated Acts) in the area of product oversight and governance, conflicts of interests, inducements, and the assessment of suitability and appropriateness and reporting to customers. These Delegated Acts were adopted in 2017.
The Commission also adopted an Implementing Technical Standard (ITS) regarding a standardised format of the IDD Insurance Product Information Document (IPID), and in 2019 a Regulatory Technical Standard (RTS) reviewing the minimum amounts of PII/financial capacity.