"It is now all the more important to offer as broad a choice of product range as possible and to transparently and accurately describe the GI service you offer"
The IDD regulates how insurance products are sold. Whilst the rule changes don’t come into force until 1st October 2018, the rules will apply to any advice or work done between now and then on any policies which have an inception date or renew from 1st October2018 onwards.
Various changes will affect brokers - for example, it is no longer enough to simply state that you use a ‘single provider’, ‘a limited range’, or ‘whole of market’. You will now need to explain to the client whether you have offered a product from a single provider, from a limited number of insurance providers, or from a wide panel following ‘a fair and personal analysis of the market’. If you have used a limited panel, you will also need to specify the names of each of the providers you approached to quote.
There is now a requirement to provide consumers with a new Insurance Product Information Document (IPID), and a Business Policy Summary for commercial clients (including professional Buy-To-Let clients). These are insurance versions of the mortgage key facts document and are designed to give clients basic information on the product cover in a consistent format to allow them to compare products.
In addition, from 1st October, all staff involved in the sale of an insurance policy (including management) must undertake no less than 15 hours of CPD per year (35 hours for anyone with a CII qualification).
Geoff Hall, Managing Director, Berkeley Alexander explains:
“Whilst October still might seem a while away, the IDD will actually affect any polices you touch before then that incept or renew from the 1st October deadline. For example, renewal invitations on policies from 1st October should be invited a minimum of 21 days ahead, so renewals invited from early September will be impacted, as will quotes you are providing now on cases you know will complete in October.
“Some key elements of the IDD continue from the existing regime, such as ensuring client communications are clear, fair and not misleading; and that your remuneration structures don’t create conflicts of interest, ensuring you put your customer at the heart of what you do. However, there will be changes that put additional responsibilities on the adviser. It is now all the more important to offer as broad a choice of product range as possible and to transparently and accurately describe the GI service you offer. If in doubt speak to your GI provider who should advise you appropriately.”
