How we’re preparing for the IDD
We’ve been working to implement IDD since the regulations first surfaced and making good progress. The regulations build on the second Markets in Financial Instruments Directive (MiFID II) requirements, with IDD extending those requirements to insurance based products and we’re identifying what this means to us, our products and business processes.
Here are the key areas we’re focusing on:
Staff involved in insurance distribution and staff who have oversight of insurance distribution must be able to demonstrate adequate knowledge and competency by completing at least 15 hours of continuous personal development each year.
Pre-sales communications to customers must disclose specific information, including information about Aegon and the services we provide, our approach to managing conflicts of interest as a description of the nature of the remuneration that our staff receive.
IDD sets out standards for product approval and product review processes, requiring a robust process in place to ensure products have an identified target market and the risks to the identified target market are assessed. The distribution strategy must be appropriate to ensure the product is distributed to the identified target market.
The IDD imposes requirements where a firm wants to provide certain documents to customers in a format other than paper. The customer must be offered the choice to receive these documents in paper, and to show it’s appropriate to provide information online for that customer.
For investment-based insurance products (IBIPS) the pre-sale illustration and yearly statements must provide a breakdown of the coasts and charges, where appropriate.
Insurance undertakings mustn’t remunerate or assess employee performance in such a way that there may be a conflict of interest with the best interests of the customers. We must also consider how we manage any potential conflicts of interest between us and your clients to ensure we’re treating them fairly.
Under the IDD, consumers will benefit from a simple, standardised insurance product information document (IPID), which aims to provide clearer information on non-life insurance products, so that consumers can make more informed decisions.
Please note this isn’t required for any of our products. However, we’ll be providing intermediaries with target market factsheets for our products impacted by IDD. These will be available by 1 October.
You can find out how we’re facilitating the change here(Opens new window)(Opens new window)(Opens new window)