EP secures better information, advice and protection for insurance buyers
Buying insurance will be made easier and safer following Parliament's vote on Tuesday to update EU rules on the information and advice offered by insurance sales staff. The current rules on sales of insurance will be amended to introduce similar information and consumer protection requirements for all insurance distribution channels unless they meet the conditions for exemption.
Insurance distributors will have to register with a competent authority in their home member state, and their sales staff will have to be fully trained to meet the requests and needs of customers. Buyers must be informed of the overall cost of the insurance contract and, before signing it, must be given standard information, free of charge, on the type of insurance, obligations under the contract, risks insured and excluded and means of payment and premiums, in clear, plain language.
To protect clients against the financial inability of an insurance distributor to pay out a premium or a claim, intermediaries (brokers or sellers) must have a permanent financial capacity amounting to 4% of the sum of all annual premiums received but no less than €18,750.
The rules will not apply to all insurance distribution. There are exemptions, for example when the insurance is complementary to the supply of goods or services and covers the risk of damage or theft, or when the amount of the premium paid for the insurance product does not exceed €600 calculated on an annual basis.
Procedure: Co-decision (Ordinary Legislative Procedure), 1st reading agreement
Debate/vote: Tuesday, 24 November
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