Rules for Co-manufacturing and Governance of Insurance Products by an Insurance Undertaking and an Insurance Broker in the Light of Insurance Distribution Regulations

Abstract

The entry into force of the Directive (EU) of the European Parliament and of the Council on the distribution of insurance, the Commission Delegated Regulation (EU) supplementing Directive (EU) 2016/97 of the European Parliament and of the Council with regard to product oversight and governance requirements for insurance undertakings and insurance distributors, as well as the Insurance Distribution Act of 15 December 2017 have created new opportunities for cooperation between insurance companies and brokers involving insurance products co-manufacturing and management. Such cooperation remains an exception to the principle of inadmissibility of brokers’ permanent contractual relationship with insurance undertakings, specified in Article 30 para. 1 point 2 of the Insurance Distribution Act. The article presents legal provisions relating to an insurance product manufacturing and governance and contracts regulating such cooperation. Its authors seek to answer a question whether it is necessary to maintain brokers’ independence from insurance undertakings in the course of an insurance product development and governance, and finally discuss the benefits and risks resulting from it.