The Financial Conduct Authority (FCA) has been pressed this week to hold fire on the Insurance Distribution Directive (IDD).
Yesterday, the Managing General Agents’ Association
(MGAA) called on the regulator to postpone the commencement of the IDD – currently scheduled to be implemented in February – until October 2018. The European Parliament’s Economic & Monetary Committee (ECON) had also this week asked the European Commission to delay introduction of the legislation.
A delay in implementation would be a “proportionate and practical response,” according to Jon Sperrin, head of financial services regulatory for Grant Thornton UK, who said that the accounting and consulting firm welcomed ECON’s push to delay the directive.
Market participants have “significant concerns” about the current timeframe for the IDD, which would see implementation on February 23, 2018, he explained.
“Ultimately the IDD is designed to deliver enhanced outcomes for consumers and a level playing field across the market. An extension would give insurance firms and policymakers the time and certainty needed to get this right. And there is an awful lot of work that needs to be done,” Sperrin commented.
He went on to say that the EU’s willingness to contemplate delaying the IDD’s implementation reflects the “genuine challenges many firms are facing.”
“Of course, the UK’s negotiations to exit the European Union introduce a further level of complexity that we are helping our clients to navigate,” Sperrin said.
“We are telling our clients to keep their foot on the pedal and expect some firms will particularly need to focus on implementing product governance requirements. This is certainly the case where insurers and distributors participate in long distribution chains. On top of that, firms need to ensure that their IDD work dovetails effectively with implementation of the Senior Managers and Certification Regimes (SMCR).”
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