The answer to this question is provided by the European Commission.

The questions concern the provision of insurance coverage by way of voluntary accession to group insurance contracts. The questions concern schemes in which banks, credit card companies, or other providers of services or goods (‘providers’) offer their customers insurance coverage either as an accessory benefit included in the price for the main product, or as an optional add-on or stand-alone product. That is done by way of group insurance policies concluded by the providers as policyholders with an insurer.
Under those arrangements, providers typically assume full responsibility for the contractual obligations towards the insurer, in particular the payment of premiums, while the customers are included as beneficiaries/insured persons in the insurance contract and have as such direct claims against the insurer in the event of an insured damage.
The details of the legal relationship and the exact rights and obligations of the parties depend on national civil and insurance contract law and may therefore differ between Member States.
This raises questions about the possible application of the IDD and of the Solvency II Directive, in particular:
• whether and under which conditions providers of goods or services or other economic operators proposing their customers insurance coverage under a group insurance policy are to be considered as insurance intermediaries subject to the IDD; and
• whether the insured persons under such a scheme have to be considered as customers or policyholders for the purposes of the IDD and of the Solvency II Directive, and are therefore entitled to benefit from the rules on protection of customers and policyholders.

Article 2(1), points (3) and (4), IDD define ‘insurance intermediaries’ and ‘ancillary insurance intermediaries’ as natural or legal persons who, for a remuneration, take up or pursue the activity of insurance distribution. Article 2(1), point (1), IDD defines ‘insurance distribution’ as “the activities of advising on, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, of concluding such contracts, or of assisting in the administration and performance of such contracts…”. Article 2(1) point (9), IDD defines ‘remuneration’ as “any commission, fee, charge or other payment, including an economic benefit of any kind or any other financial or non-financial advantage or incentive offered or given in respect of insurance distribution activities”.
The IDD does not explicitly refer to voluntary group insurance. However, in its judgment of 29 September 2022, TC Medical Air Ambulance Agency, C-633/20 (ECLI:EU:C:2022:733), the Court of Justice of the European Union (‘the Court’) held that “the concept of ‘insurance intermediary’ and, therefore, that of ‘insurance distributor’ … covers a legal person whose activity consists in offering its customers membership on a voluntary basis in return for payment which it receives from them, of a group insurance policy to which it has subscribed previously with an insurance company, where that membership entitles those customers to insurance benefits’. That observation confirmed a statement in an earlier judgement of 24 February 2022, (A and Others (‘Unit-Linked’ Assurance Contracts), Joined Cases C-143/20 and C-213/20, ECLI:EU:C:2021:687, paragraphs 87-88)), in which the Court held that an undertaking which is a policyholder in a unit-linked group life insurance contract and offers consumers membership in that life insurance contract has to be considered as insurance intermediary if that activity is carried out for a remuneration.

The Court based its interpretation essentially on the grounds that the activity of distributing, for remuneration, voluntary membership of a group insurance policy is comparable to the paid activity of an insurance agent or another distributor of direct insurance contracts (judgment C-633/20, paragraph 45). It further pointed to recitals 5, 7, 6 and 16 of the IDD which clearly show the intention of the legislator to extend the scope of the IDD to all sales of insurance products and to make sure that consumers benefit from the same level of protection despite differences between distribution channels, for reasons also relating to the need to establish a level playing field in respect of competition between all insurance distributors.
With regard to the question about the scope of the insurance distribution activity in the case of voluntary group insurance, it is clear from the Court’s judgments that the following factors need to be considered when assessing whether a person whose activity consists in offering its customers membership of a group insurance policy is considered an insurance intermediary:
• whether the membership in the group insurance policy is voluntary;
• whether the membership entitles the customer to insurance benefits;
• whether the distribution activity is remunerated.
Membership is not considered to be voluntary where the persons adhering to the group contract “cannot take an individual decision to join” (see recital 49 to the IDD). That may be the case, for example, with a mandatory occupational pension arrangement for employees of a certain undertaking, or where professional organisations such as professional chambers or bar associations conclude mandatory group insurance contracts in which members must participate just by virtue of the statutes.
However, the mere fact that a provider of goods or services offers insurance coverage under a group insurance contract in a bundle with goods or services – for example, as “automatic” additional benefit with a credit card – does not mean that membership is non-voluntary. In such cases, providers have also to comply with the rules for cross-selling in Article 24 IDD, in particular Article 24(3) IDD which provides that “where an insurance product is ancillary to a good or a service which is not insurance, as part of a package or the same agreement, the insurance distributor shall offer the customer the possibility of buying the good or service separately”.

With regard to the condition of remuneration, the Court explicitly points out in the judgment C-633/20 that, in view of the broad interpretation of the concept of ‘remuneration’ it is irrelevant whether the payment, with each additional membership to the group insurance policy, is made by the members in return for rights to the insurance benefits transferred to them by the provider/policyholder or by the insurer in the form of a commission or of another financial or non-financial advantage or incentive.
All that matters is that the provider/policyholder has an economic interest of its own to gain the largest possible numbers of members so that the various payments finance or exceed the amount of the premium which it itself pays to the insurer under the insurance contract (judgment C-633/20, paragraphs 41-42). That may also be the case where the insurance benefits are presented as a “free” accessory to the main product or service but are in reality factored into the total price for a package of services and, possibly, goods.
The above implies that, where an assessment is carried out and all the cumulative conditions mentioned above are met, the policyholder distributing a voluntary group insurance membership is to be considered as an insurance intermediary subject to the rules of the IDD. The persons acceding as members to the group insurance contracts have to be regarded as customers. Where the group insurance membership is offered as a complement to a good or service, the policyholder/distributor may be considered as ancillary insurance intermediary subject to the IDD if the conditions set out in Article 2(1), point (4) are met.

In addition, the Court held in the judgments C-143/20 and C-213/20 that an undertaking which acts as an insurance intermediary distributing membership in group life insurance contracts has to communicate to customers, before they adhere to the contract, the precontractual information set out in Article 185 of the Solvency II Directive. To enable the policyholder/distributor to comply with that obligation, the insurance undertaking which concludes the group insurance contract has to provide the policyholder with the necessary details of pre-contractual information for their subsequent transmission to the final customer. The information must be presented in a clear, precise, and comprehensible form to enable customers to choose an insurance product that corresponds to their demands and needs (judgment C-143/20 and C-213/20, paragraphs 89-91). Although the Court's considerations relate directly to the information obligations under Article 185 of the Solvency II Directive only, which were at issue in the case decided, they can also be applied to other pre-contractual information obligations, such as the requirements under Articles 18 and 19 IDD or the obligation to provide the customer with the PRIIPs KID or the Insurance Product Information Document (IPID).
The above principles and considerations are based on provisions of the IDD and the Solvency II Directive which do not presuppose consumer status and are therefore not limited to operations with consumers. They also do not distinguish between natural and legal persons.
Finally, it should be pointed out that, according to Article 16 IDD, when using the services of insurance intermediaries for the distribution of their products, insurance undertakings shall only have recourse to registered insurance intermediaries. Insurers concluding group insurance contracts for the distribution of membership rights by policyholders which are insurance intermediaries must therefore make sure that those intermediaries are registered in accordance with Article 3 IDD or are exempt from registration under Article 1(3) IDD.

Disclaimer provided by the European Commission:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.