The Council of Ministers has given the green light in the first round of the Draft Law on the Distribution of Insurance and Reinsurance in adaptation of the new European standards and that reinforces the protection of the insured through obligations of transparency and conduct for insurance distributors. The client must be informed of all costs, expenses and risks assumed in insurance-based investment products, and will have access to a periodic evaluation of their suitability. The penalties for non-compliance with information obligations are tightened and so-called cross-sales are regulated for the first time, that is, those that add services or auxiliary products to the insurance contract. The text must obtain the corresponding opinions and will return to the Council of Ministers to be approved as a Bill and begin the parliamentary process.
Directive 2016/97 of the European Parliament and of the Council of January 20, 2016, on the distribution of insurance, has introduced a series of amendments in Directive 2002/92 / EC of the European Parliament and of the Council, of 9 December of 2002, on insurance mediation. This seeks to guarantee the same level of protection to customers, regardless of the channel through which an insurance product is acquired and its translation to national provisions regarding access and exercise of insurance and reinsurance distribution activity .
Insurance and reinsurance distributors are considered not only to mediators, as until now, but also to insurance and reinsurance entities, as well as other market participants who distribute products on an auxiliary basis (such as travel agencies or companies). car rental), which will be considered as complementary insurance mediators. Likewise, the concept of insurance distribution includes the activity carried out through the so-called insurance comparators.
Within the categories of insurance mediators, banking-insurance operators are configured, from a regulatory point of view, as insurance agents (exclusive or linked), although with certain particularities. The limitations regarding the provision of a single banking insurance operator of the networks of credit institutions or financial credit institutions are abolished, without prejudice to maintaining the incompatibility so that the assigned networks can operate simultaneously, throughout or in part, as mercantile collaborators of other insurance mediators of different kinds.
The APL provides that insurance mediators can use websites or other remote marketing techniques through which information is provided to the customer comparing prices or coverage of a certain number of insurance products from different companies.
The requirements of organization and professional competence and the obligations of information and rules of conduct that insurance distributors must follow are also reinforced. The obligation is established for all insurance mediators to prove that the funds belonging to clients are transferred through accounts completely separate from the other economic resources of the mediator.
The duty of information to the client of insurance products is widely regulated in the APL, establishing additional requirements in relation to the distribution of investment products based on insurance, seeking to avoid or, where appropriate, prevent potential conflicts of interest. As regards the information obligations for users of insurance-based investment products, it is established that all associated costs and expenses must be informed, including the cost of advice, where appropriate, the cost of the investment product based on insurance, and the way in which he can pay it, as well as any payment related to third parties. The risks associated with insurance-based investment products or certain proposed investment strategies should be warned; and finally, for situations where advice is offered, the obligation to provide a periodic assessment of the suitability of the investment product is created.
The concept of cross-selling is introduced, with the obligation for the insurance distributor to inform the customer, when the insurance contract is offered together with services or auxiliary products, if the different components can be purchased separately, and the corresponding supporting documents for the costs and expenses of each component. Requirements regarding product governance are established, in particular in the design, approval and control of the same.
In terms of infringements and sanctions, its regime is strengthened, establishing appropriate penalties of a pecuniary nature and in line with the general framework established by Directive 2016/97.
