What is the IDD directive?

The IDD is the abbreviation for the European Insurance Distribution Directive. The IDD regulates the distribution services for insurance products. One of its main objectives is to provide a set of rules aimed at strengthening consumer protection.

The IDD contains information obligations and conduct of business rules that apply to the distribution of all types of insurance products. It also contains additional requirements that apply solely to insurance-based investment products (IBIPs). The IDD aims to align the rules governing these products with those that apply in the banking sector under the MiFID I and MiFID II directives 1 .

This brochure summarizes the main information obligations and conduct of business rules that apply to the distribution, in Belgium, of insurancebased investment products 2 by an insurance company or an insurance intermediary.

1 A separate brochure sets out the rules that apply under MiFID II. 2 A separate brochure sets out the rules that apply to the distribution of other types of insurance products to retail customers.

Insurance-based investment products

The concept of an insurance-based investment product (IBIP) denotes an insurance product which offers an investment component that is exposed to market fluctuations 3. These are:

• savings insurance, namely, class 21, 22 or 26 insurance that comprises a savings element or a combination of such contracts; • investment insurance, namely, class 23 insurance or combinations of class 23 products and combinations of savings insurance and class 23 products.

As a customer, the level of protection you enjoy is higher if the distributor provides you with advice about an insurance-based investment product than if you do not receive any advice.

Three overarching principles

The IDD directive requires distributors to abide by three overarching principles when distributing insurance-based investment products:

• act honestly, fairly and professionally in a way that best serves your interests; • provide you with information that is accurate, clear and not misleading. This information is meant to enable you to take informed investment decisions; • take account of your individual situation, and in particular of your demands and needs.

3 With the exception of officially recognized occupational pension schemes that fall within the scope of Directive 2016/2341 or of Directive 2009/138/EC (2nd pillar pension).

Before concluding an insurance contract (p. 8)

1

The distributor must put you in a category of customers:

Retail customer Professional customer The distributor must ask you for certain items of information in order to determine your demands and needs and to assess the appropriateness or suitability of the products in question (= duty of care).

The type of assessment to be carried out depends on the type of service:

2

• distribution relating to sales without advice • distribution with advice

Ongoing obligations for distributors (p. 20)

The distributor must supply

you with certain items of

information. Examples:

• Information about the distributor • Information about the insurance-based investment products • Information about the costs and charges • … • Periodic reports and information • Where applicable, periodic suitability assessment

After concluding an insurance

contract (p. 18)

4

• Preventing conflicts of interest and be transparent • Following the rules governing remuneration • Handling complaints and claims