The Global Relevance of the EU Single Market on Insurance After the Insurance Distribution Directive (IDD)

Abstract

The amount of insurance premiums collected within the European Union places this market among the world leaders. Although insurance regulation is still partly national, the European Union's effort to introduce harmonized rules between the Member States has intensified since the financial crisis. This essay intends to highlight the global relevance assumed by the regulatory framework of the European Union. The introduced set of rules arises from the principles established internationally and, in turn, influences these principles. Thus, the EU regulatory framework on insurance is relevant to understand the potential evolution of the international standards on insurance. The analysis focuses on the rules protecting the policyholders, as this is the main objective of the insurance regulation and supervision of the European Union. Therefore, this study examines the recent Insurance Distribution Directive (IDD) salient features in light of the overall regulatory framework governing the insurance business in the European Union. In addition, the study also tests the resilience of new rules to the COVID-19 pandemic and digital transformation, which were not at the core of the IDD.