Question ID: 3073
Regulation Reference: (EU) No 2016/97 - Insurance Distribution Directive
Topic: Freedom to provide services (Art. 4 and 5 IDD)
Status: Rejected
Date of submission: 11 Apr 2024
Question
Part 1) As per previous answer, an insurance intermediary requesting to do cross-border insurance intermediation in FOS in a host-State, according to “the IDD […] shall communicate specific information […] notably the name of any insurance or reinsurance undertaking represented and the relevant insurance classes, if applicable”. What kind of ‘specific information’ is the home-State authority/regulatory body allowed to request, and what may it not (if any). For practicality, for e.g. can it request to provide the intermediary’s contract of intermediation with the mandatory Insurance undertaking (for the purpose of limiting its classes of activity in Freedom of Service), or providing its financial status, or reasons for wanting to enter another EU insurance market or its future plans thereof, or to require to compulsorily provide the name of the insurance undertaking represented – if possible considering the difference (if any) between the insurance broker and an insurance agent (equal or different treatment applies given that in many EU member States, agents can act as pluri/multi-mandatary even via horizontal co-operations through other locally-authorized intermediaries?). Part 2) is an Insurance intermediary allowed to take as many additional mandates it wishes from either home-State Insurance undertakings or from other ones acting in FOS (from different EU States) in the host-State, as well as from local insurance companies (licensed within the host-State), and thus relate itself also with the latter’s local distributors/intermediaries through horizontal co-operations? Please indicate if any limits apply. Part 3) to clarify your warning of potential illegitimate activity cit. “[…] it would be considered to be carrying out an unauthorized insurance distribution activity”, is the intermediary allowed to act on the foreign (host-State) market without further due notifications to the home-State for additional classes of business than those originally notified? If not, may it do so only once it has obtained a new local (related to the host-State) mandate from one or more additionally represented insurance undertakings, also including in ‘horizontal co-operation’ through other duly mandated distributors/insurance intermediaries (equally from other insurance Agents or Brokers). If not, is an ‘update/integration’ to the already sent notification enough for the addition to render it legitimate activity – and if so, does the home-State authority have discretion to demand further information and in so doing de facto halting or blocking the extension of activity in FOS?
Background of the question
Thanking the EIOPA for answer n. 2838, we kindly require vital (in order to be acting within full legality in the home-Country and in the host-Country) further details on the aforementioned topic of FOS distribution of insurance intermediaries. We kindly request to consider that all questions relate solely to the insurance intermediary, not the related or represented insurance undertaking (licenced carriers). Please consider that in any and all cases, the insurance intermediary should be duly authorized as the notification has already reached the receiving host-State, thus the EU intermediary in FOS would be already allowed to operate in such host-EU Country. Also, the represented/mandatary insurance undertakings/carriers referred to should be only duly authorized companies by their respective local regulatory body(ies) and fully compliant to the Solvency II requirements.
EIOPA answer
After a full assessment of your question, we have decided to classify your request as Category 3 (rejection due to "bespoke advice").
Unfortunately, your three different questions would require EIOPA to provide you with a customized response, whereas EIOPA’s Q&A process cannot replace any specific individual legal advice/consultation.
In addition, elements of your question 3 are covered, to the extent appropriate for the Q&As as a regulatory tool, in the last paragraph of the Q&A 2838 :
“In addition, if the insurance intermediary intends to distribute the product(s) of the abovementioned insurance undertaking on the basis of a mandate from another insurance undertaking or insurance intermediary duly authorized to distribute insurance products, or certain classes of insurance, as applicable, in the respective host Member State on the basis of a horizontal co-operation agreement, this would not be permitted either. The fact that there is horizontal co-operation agreement in place which includes a mixture of mandates both from insurance undertakings or insurance intermediaries authorised to sell insurance products in the host Member State and from an insurance undertaking which is not authorised to sell products, does not obviate the need for the latter insurance undertaking to comply with the aforementioned Solvency II requirements. Therefore, if the insurance intermediary is mandated by an authorized insurance undertaking/distributor in the host Member State, it can only distribute the products of insurance undertakings authorized to carry out cross-border business in the host Member State.”