The assessment of inducements under Article 8 of Delegated Regulation 2017/2359 should be distinguished from the assessment under  Article 30 of IDD’s requirements on suitability and appropriateness, which is to ensure that only products, which are suitable or appropriate to a customer’s personal situation, are offered or recommended.

Criterion a) of Article 8(2) of Delegated Regulation 2017/2359 provides that the insurance intermediary or insurance undertaking must assess whether an inducement scheme could provide an incentive  to the insurance intermediary or insurance undertaking to offer or recommend a particular insurance product or a particular service to the customer, despite the fact that the insurance intermediary or insurance undertaking would be able to offer a different insurance product or service which would better meet the customer’s needs. The objective of this criterion is to ensure that insurance intermediaries or insurance undertakings have effective measures in place to prevent an inducement from influencing the offer or recommendation in a way that may be detrimental to the customer.

Insurance intermediaries and insurance undertakings must assess whether there is a risk of a detrimental impact to the quality of the service to the customer because the inducement or inducement scheme provides an incentive to offer or recommend a particular product. If an incentive exists, the insurance intermediary or insurance undertaking must ensure that there are effective measures in place to prevent the inducement from influencing the outcome of a suitability or appropriateness assessment.

The potential for the inducement to influence the outcome of the suitability or appropriateness test and the measures that an insurance intermediary or insurance undertaking has in place to prevent the inducement from influencing the suitability or appropriate assessment are factors, which must be considered during the assessment of the inducement under criterion 8(2)(a), Delegated Regulation 2017/2359.