Article 8(2) of Delegated Regulation 2017/2359 requires that insurance intermediaries and insurance undertakings shall perform an overall analysis taking into account all relevant factors that may increase or decrease the risk of detrimental impact on the quality of the relevant services to the customer and any organisational measures taken to prevent the risk of detrimental impact. 

One of the criteria that they must consider is Article 8(2)(d) of Delegated Regulation 2017/2359, which is whether the inducement is entirely or mainly paid at the moment of the conclusion of the insurance contract or extends of the whole term of that contract. Article 8 (2) requires an assessment of the risk of detrimental impact only, therefore any ongoing benefit is not relevant to this assessment.

The IDD is neutral on whether up-front or on-going inducements may be detrimental to the quality of the services being provided to the customer. Article 8(2)(d) of Delegated Regulation 2017/2359 requires that the insurance intermediary or insurance undertaking consider the timing of the payment of the inducements and assess as part of a broader assessment whether it gives rise to any detrimental impact. 

In order to consider whether an on-going inducement has a detrimental impact on the quality of services to the customer, an insurance intermediary must consider all factors, as well as any organization measures put in place to prevent a detrimental impact.