The European Council has agreed to delay the transposition deadline and application of new rules on insurance distribution.
The changes, which had been due to come into force on 23 February 23, are now delayed to 1 July 2018.
The application date for the new regulations is 1 October 2018.
The directive 2016/97, which was agreed, was introduced in January 2016.
It is aimed at improving consumer protection in insurance products.
The delay will help member countries in transforming the directives into national laws and regulations in their respective countries.
The new directive will replace the 2002 Insurance Mediation Directive and offers an updated legal framework that regulate how insurance and reinsurance products including insurance-based investment products are bought and sold, including across national borders.
The delay is also expected to help the insurance industry to prepare for the directive and for the necessary changes to comply with the new rules. It is also expected that member states will also have more time to translate the directive’s provisions.
However, the European Parliament and the Council are not expected to formally adopt the new directive until March, due to lack of time. The delay is also expected to be applicable retrospectively.
The directive is expected to improve retail insurance rules in a manner that will enable market integration. It can help in establishing necessary conditions for fair competition between distributors of insurance products.
It can also strengthen protection of policyholders, in particular with regards to life insurance products with an investment element.
Image: EU to delay insurance start date. Photo: Courtesy of taesmileland/FreeDigitalPhotos.net.