02 February 2021

BETTER FINANCE Response to the EIOPA survey on the application of the Insurance Distribution Directive (IDD)

As a first step towards the preparation of its report on the application of the IDD, EIOPA launched an initial survey addressed to external stakeholders, such as consumer associations, academics, trade associations, insurance undertakings and insurance intermediaries.

Note: This feedback is provided by BETTER FINANCE together with its German (BdvBund der Versicherten e.V.) and French members.

1) Improvement of quality of advice and selling methods

Provide in the box below any qualitative or quantitative data/evidence you have which could be used to assess whether the quality of advice and selling methods have improved, deteriorated or remained the same following the implementation of the IDD:
• For Germany besides the statistics provided by BaFin, the annual reports of the insurance ombudsmen are crucial. There are two ombudsmen, both located in Berlin:
o Ombudsman for life and non-life insurances („Versicherungsombudsmann“).
o Ombudsman especially for private health insurances („PKV-Ombudsmann“).
• In their annual reports there is always a statistical part on the total number of complaints, their distribution on different insurance classes, whether addressed to insurers or intermediaries, and how many complaints or arbitration procedures were successful for the policyholders. In 2019 there were about 13000 admitted complaints related to life and non-life insurance and about 5000 admitted complaints related to private health insurances (in total: more than 18000 admitted complaints).
• This figure has been compared with the total number of complaints reported by BaFin (in 2019: 7.850), in order to fully understand its relevance (no double-counting between BaFin and Ombudsmen). Related to life-insurances complaints about run-offs and the right of withdrawal were particularly relevant.
• In France, even if it is difficult to clearly verify that improvements effectively happend, we observed some general improvements in the behaviour of some retail distributors concerning the provision of advice. The directive is giving more importance in regard to conflict of interests and remuneration comperad to the past. However, a clear difference between "independent" advice and “tied agent” sales is still missing. More worryingly, we do not see any material development or any “independent” advice in the life insurance market....

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