-The EU's Council of Ministers approved the Insurance Mediation Directive, which will improve choice and reinforce protection for customers while helping insurance intermediaries such as insurance brokers, banks and car dealers - to market their services across borders. The Council accepted the amendments proposed by the European Parliament in second reading. The Directive requires that all intermediaries be registered in their home Member State. To obtain that registration, they will need to meet strict requirements. Once they have done so, they will be free to sell their services anywhere in the EU.
The Directive will require that all individuals or companies who carry out insurance or reinsurance mediation must be registered in their home Member State on the basis of the following minimum requirements:
possession of appropriate knowledge and ability as determined by the regulations applicable in that Member State
being of good repute
possession of professional indemnity insurance or any other comparable guarantee against liability arising out of professional negligence (at least € 1m per claim and € 1,5m per year for all claims)
sufficient financial capacity to protect customers against any failure by the intermediary to transfer customers' premiums to insurance companies or to pass on to customers money received for claims under the policies they hold.
The Directive will also require insurance intermediaries to give customers clear explanations for the advice they give on which products to buy. They will need to specify accurately in writing, in terms comprehensible to the customer, why they have recommended particular products in the light of the customer's individual requirements.
The Directive will allow Member State financial authorities and other bodies (i.e. insurance undertakings or professional associations) to be involved in the registration process by, for instance, registering insurance intermediaries under the supervision or control of the competent authority of that State.
Under the Directive, Member States will be committed to providing easy public access through a single information point to details of registered insurance and reinsurance intermediaries, the competent authorities with which they are registered and the Member States in which they conduct business.
Finally, the Directive encourages Member States to set up appropriate and effective Alternative Dispute Resolution procedures for out-of-court redress for dissatisfied customers, in particular via the cross-border FIN-NET network launched by the Commission in 2001
Approved Directive
Corrigendum
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