Ομιλία - Παρουσίαση: Κλεοπάτρα Χαλδαίου, Senior Manager, Ασφαλιστικές και Αναλογιστικές Συμβουλευτικές Υπηρεσίες, ΕΥ Τίτλος Ομιλίας: “Οδηγία Διανομής Ασφαλιστικών Προϊόντων: Το μέλλον της διανομής ασφαλιστικών προϊόντων”

1. The better the question. The better the answer.
The better the world works.
IDD: The future of distribution for insurers
June 2018
Kleopatra Chaldaiou
Senior Manager
Insurance & Actuarial Services, EY Greece

2. Today’s discussion
EU Consumer protection regulation1
Overview of IDD2
Impact Analysis3

3. EU Consumer protection
regulation
01SECTION

4. EU Consumer protection regulation (1/3)EU Consumer protection regulation - Overview
01SECTION
Revision of Insurance
Mediation Directive -
Replacement by Insurance
Distribution Directive
EU Consumer
protection
regulation
4

5. TODAY
20152014 2016 20182017
Oct 2014
Draft of
POG
guidelines
01 Oct 2018
Deadline for the
transposition of IDD
into national laws of
the EU Member States
30 Jun 2015
Agreement
on the
proposal for
a revised
Directive on
IDD,
following
final trilogue
negotiations
02 Feb 2016
Publication of
IDD
Regulation
23 Feb 2016
The IDD
entered into
force
01 Feb 2017
EIOPA published
its final report on
technical advice
on possible
delegated acts
regarding IDD
07 Feb 2017
EIOPA issued
draft ITS for the
IPID under the
IDD
Apr 2016
EIOPA published its
final report on Public
Consultation on
Preparatory
Guidelines on POG
20 Jan 2016
The IDD was
adopted
01 Aug 2016
EIOPA
published a
Consultation
Paper on on
ITS on IPID
14 Dec 2015
The Council
of the EU
adopted the
IDD
24 Nov 2015
The
European
Parliament
adopted the
IDD
IDDtimeline
11 Aug 2017
EIOPA issued
final ITS for
the IPID under
the IDD
01SECTION
EU Consumer protection regulation – IDD timeline
21 June 2018
Greek Law
Proposal for the
transposition of
IDD
5

6. Overview of IDD
02SECTION

7.  Improved sales standards
 New areas of protection
 Standardized information for insurance policy (IPID)
 Products best suited to their needs
National Supervisors
Increased certainty in the rules of insurance industries
Insurance Distributors
 Fair competition
 Restoration consumer confidence
 Expanded business opportunities
 Lower costs of operating cross-border
 Higher consumer demand to increase sales
IDD is a “minimum harmonization”
directive; Member States can adopt
stricter provisions if they wish.
Consumers
02SECTION
Overview of IDD
Main features & benefits
IDDfeatures
IPID provided to customers of non-life insurance
Coverage of all insurance distributors
Level playing field between IBIPs & products subject
to MiFID II
Clearer cross-border procedures for a deeper internal
market in insurance
Increased transparency through remuneration disclosures
Provisions that increase the protection of customers
IDD benefits
7

8. Key areas
02SECTION
Overview of IDD
IDD in a nutshell
8

9. 02SECTION
Overview of IDD
IDD in a nutshell
Remuneration
Distributors are not remunerated (or
performance is not rewarded) in a way that
conflicts with the duty to act in the best
interest of the customer
Product governance and
oversight
Requirement to have a product approval
process and define a target market.
Professional and
organizational requirements
Distributors to maintain minimum
professional knowledge and competence
requirements
Conflicts of interest
Between distributors and manufacturer
and consumers
Customer communication
Enhanced customer information
requirements including the introduction of
the IPID
IBIPs
Additional requirements for IBIPs,
including suitability statement and regular
suitability report to ensure alignment with
customer’s objectives
9

10. 02SECTION
Overview of IDD
Changes from IMD
IDD vs IMD
Extensive product
governance requirements
►Introduction of POG
requirements for all insurance
products (with exemption of
large risks)
► Introduction of target market
and approval process.
Cross border activity
►Simplified procedure for cross-
border entry by intermediaries
into EU insurance markets
Conduct of business rules
►Enhanced information and
conduct of business
requirements to ensure cross -
sectoral consistency
Administrative sanctions
for breaches
►Much stricter administrative
sanctions and other measures,
including very high pecuniary
sanctions
Broader scope
►Scope covers also insurance
undertakings and other
businesses that sell insurance
Professionalism
requirements
►Minimum professional
knowledge and competence
requirements
►At least 15 hours of
professional training or
development per year
10

11. • Definition of target market
• Set up of distribution strategy
• Set up of commission/fee
structure
• Product testing to ensure
customers’ interests
1
PRODUCT
DESIGN
Manufacturer Manufacturer / Distributor (Retail & Corporate clients)
• Suitability and appropriateness
assessment
• Provision of all sales information
from distributors to
manufacturers to be used for
their reviews
3
DISTRIBUTION
• Review and assessment of
the product performance
adequacy
• Assessment of the distribution
strategy appropriateness
• On - going identification of
events that could affect the
product promises
4
MONITORING
• Distribution of the product to the
target market
• Provision of appropriate
information (KID to investor
customers & IPID for non-life
products)
2
PRODUCT
MARKETING
Insurance
product
life cycle
02SECTION
Product Development
Life cycle of an insurance product
11

12. Impact Analysis
03SECTION

13. Product design Product
distribution
Claims
Management
Client
relationship
Legend:
Human
resources
Communication
General servicesInformation
systems
Not impacted Impacted Strongly impacted
03SECTION
Impact analysis
Potential impacts on company’s processes
Controls and
Internal Audit
13
InvestmentsUnderwriting
Accounting Legal & Tax

14. HR
• Training and competence
• Good repute checks
• Performance management and remuneration processes
Marketing
• Clear, fair and not misleading processes of communication
• Review of current communication
Sales
• Requirement to act in the
customers best interests
• Review of current
communication
• Bundled products
• Sales processes to be
reviewed/enhanced
• Provide customer with an
IPID
Legal &
Compliance
• Ensure rule change alignment / gap analysis of current state
vs IDD requirements
Relationship
managers
• Assess remuneration arrangements so as to avoid
detrimental impact to customers
Governing
functions
• Review of distribution strategies to avoid conflicts of interest
• Review and approval of remuneration (incl. bonus)
arrangements
High impact Moderate impact Low impact
03SECTION
Impact analysis
Potential implications on company’s divisions
14

15. Firms need to conduct their business in a fair, transparent and efficient way and ensure they
treat their customers fairly and have regard to market integrity.
Customers
Markets
Competition
Challenges
• Information asymmetry
• Unsuitable products and services
• Remediation
Customers
• Cultural and conduct improvements
• Communication to society
• Manipulation of information
Markets
• High entry barriers to the market
• Innovative culture
• Supply and demand misalignment
Competition
03SECTION
Impact analysis
Culture is an important factor to consider
15

16. Thank you