"There is still a significant number who are yet to engage with what it will mean for their business."
The IDD replace the Insurance Mediation Directive on the 1st of October and aims to enhance consumer protection and better support competition between insurance distributors.
Like the IMD, the IDD covers the authorisation, passporting arrangements and regulatory requirements for insurance intermediaries. However, the application of the IDD is wider, covering organisational and conduct of business requirements for insurance and reinsurance undertakings. The IDD also introduces requirements in new areas, including product oversight and governance, and enhanced conduct rules for IBIPs.
A recent survey by UnderwriteMe found that just 60% of advisers who sell protection were ready for the 1st of October deadline.
Although over 80% of advisers are already collecting health information from their clients as part of the recommendation process, just under half admitted to contacting only one or two insurer underwriting teams to assess the effect of this information on price and product suitability.
Geoff Hall, chairman of Berkeley Alexander, commented: “The IDD puts additional responsibilities on the adviser, but compliance needn’t be a headache. Some key elements of the IDD continue from the existing regime, such as ensuring client communications are clear, fair and not misleading; that your remuneration structures don’t create conflicts of interest; and ensuring you put your customer at the heart of what you do, but there are now some additional rules.
"We’ve taken the stress and uncertainty out of the process and put together this new quote pack for brokers that takes care of all the new requirements. It leads advisers through the sales process step by step to make sure they deliver a fully compliant GI sale as simply as possible.”
Phil Jeynes, head of sales and marketing at UnderwriteMe, added: “It’s reassuring to see three out of five (60%) of the advisers and brokers we surveyed say they are aware of the new IDD requirements and are fully prepared, however there is still a significant number who are yet to engage with what it will mean for their business.
“Modern technology is designed to support advisers. Ringing round a small group of underwriters to gauge the effect of a health disclosure on pricing is outdated and, in the post IDD world, may be insufficient. UnderwriteMe’s Protection Platform has been specifically designed to support personal recommendations by asking the right health questions, enabling the comparison of customer specific terms and benefits across nine insurers.”
