Plea for Uniform Regulation and Challenges of Implementing the New Insurance Distribution Directive

Abstract

This study takes up and evaluates new developments in EU insurance regulation, in particular the new EU Insurance Distribution Directive (IDD-Directive 2016/97/EU). The Directive sets a new European legal framework for insurance distribution with an implementation deadline of 23 February 2018, now postponed 7 months to 1 October 2018. The new IDD attempts to reduce cross-sectoral and cross-border inconsistencies by establishing a more uniform regulatory framework in the European insurance market. For this purpose, minimum quality standards and disclosure requirements are introduced to insurance distribution systems. In contrast, U.S. insurance regulation mostly continues to be the purview of state government, leading to cumbersome and conflicting provisions as well as higher compliance costs. The purpose of this article is to present an overview of the new EU IDD rules, to discuss potential challenges of the transposition of the IDD into national law, and to answer whether the new EU regulatory uniformity could set an example for U.S. regulatory dispersion.