Definition
The IDD is a new EU wide directive aimed at ensuring minimum harmonisation of insurance regulation across the EU, and comes into force on the 1st October. There is no formal guidance from the legislators and regulator specifying precisely which business functions within a firm come within IDD’s scope, but the following is the Directive’s definition of ‘insurance distribution’:
“’Insurance distribution’ means 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, in particular in the event of a claim, including the provision of information concerning one or more insurance contracts in accordance with criteria selected by customers through a website or other media and the compilation of an insurance product ranking list, including price and product comparison, or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract using a website or other media”
This definition forms the basis of the revised FCA guidance under PERG 5.16 ‘Meaning of insurance distribution and reinsurance distribution’.
The IDD applies to insurers, insurance intermediaries, price comparison websites/aggregators and ancillary insurance intermediaries.
One of the significant requirements for IDD is the introduction of a mandatory 15 hours of CPD for all employees involved in the “distribution” of insurance products.
So, who within your business is captured by the IDD?
The conduct requirements applying to insurance distributors will vary, dependent on the nature of their business, the classification of its customers, the products it distributes and the channels used for doing so.
Sysc 28 outlines that those undertaking the following roles will be captured by IDD will be:
- directly involved in the firm’s ‘insurance distribution activities’**
(e.g. sales person, or claims handler) - responsible for the supervision of a relevant employee acting in the capacity set out in (1)
(e.g. sales supervisor, claims manager) - within the management structure responsible for the firm’s ‘insurance distribution activities’
(e.g. Sales director, or Operations director)
* Under SYSC 28, the term ‘relevant employee’ includes sub-contractors, contract staff, those working on behalf of the firm through a third party arrangement.
** ‘Insurance distribution activity’ is defined as any of the following in relation to a contract of insurance or life policy:
- dealing in investments as agent
- arranging (bringing about) deals in investments
- making arrangements with a view to transactions in investments
- assisting in the administration and performance of a contract of insurance
- advising on investments
- agreeing to carry on a regulated activity
| Distribution Activity | Business Function |
|---|---|
| Advising on/proposing |
|
| Carrying out other work preparatory to the conclusion of contracts of insurance |
|
| Assisting in the administration and performance of such contracts |
|
| Other |
|
IDD from The Chartered Insurance Institute
As already mentioned, staff involved in the distribution of insurance products will be expected to complete 15 hours of CPD each year and demonstrate minimum levels of competency and knowledge in specific core areas.
The CII’s IDD portal provides;
- Pre-set IDD pathway to cover core training
- 400+ role-specific product training modules
- Assessment facility to test competency levels
- Integrated authoring tool to allow the creation of specific product training
- IDD reporting system
- Integrated CPD that automatically adds and displays learning hours
Learner experience
Learners have access to a new IDD 15-hour CPD scheme within the CPD settings area. Administrators can assign their learners with the “Insurance Distribution – Core” Pathway or users can register onto this themselves from within the Find Learning area.
The pre-set IDD - Core pathway has a recommended 8 hours of CPD, you can add to this within the pathway by creating CPD activities that are relevant to the subject areas such as specific webinars you attend.
To ensure all staff achieve their 15 hours of CPD a year the administrators can create product specific pathways for their learners for example if you work in Motor you can create a pathway using the motor content already available to you through Assess.
Tracking progress
“My Team” can be located in the menu for all managers who have direct reports. You are presented with a card for each member of your team that reports directly to you. You can also switch the view to include all the people that report to your staff too.
Each card displays your staff name, their photo or avatar and a visual indicator displaying the total amount of completed CPD towards their target in their current CPD year. Another visual indicator displays the percentage complete of all currently assigned activities. Finally, the card has an indicator for the number of activities which are overdue. Clicking on a card takes you into the user's profile.
There are a number of filters on the left-hand side of the page. These enable you to filter the staff cards to see people in specific organisation units, those who have overdue activities and for people with CPD years coming to an end.
There is also an area which lists all activities assigned to your staff. Clicking on Insurance Distribution Directive” enables you to see your staff progress in a new card view. These cards show the completion status for each person, if the activity is a pathway it displays the progress through the activities as a percentage and it shows any current objectives in forms and any pending actions the manager may have within the form workflows.
Managers and administrators will also be able to track staff progress using the “Insurance Distribution Directive – Core” pathway report located in the reports area. This shows you an overview of your staff progress on this pre-set pathway, you can also use the filters to show progress on full name, line manager, entire organisation and organisation units. When hovering over the data this will show you how many users are “Not attempted” “Incomplete” and “Completed” within your organisation.
How do I get it?
This is available to anyone with a full assess licence.
We will also be running IDD webinars to support you in implementing IDD within your business. Please contact us on assess.config@cii.co.uk to register onto these free webinars.