Employees of an insurance undertakings are not involved in the distribution process but may have contact with existing policyholders to provide information on contracts or support with partial surrender request for example. It is not clear if these activities would fall under the training requirement. Activities are solely of supporting and managing of existing contracts.

The answer to this question is provided by the European Commission.

Article 10(1) of Directive (EU) 2016/97 (Insurance Distribution Directive - IDD) provides that insurance and reinsurance distributors and employees of insurance and reinsurance undertakings carrying out insurance or reinsurance distribution activities are required to possess appropriate knowledge and ability in order to complete their tasks and perform their duties adequately. Under Article 10(2) IDD, the persons concerned (see below) need to comply with continuing professional training and development requirements in order to maintain an adequate level of performance corresponding to the role they perform and the relevant market.

These persons are:

- insurance and reinsurance intermediaries;

- employees of insurance and reinsurance undertakings, and

- employees of insurance and reinsurance intermediaries.

However, according to Article 10(2) subparagraph 5 of IDD, the requirements will not apply to all natural persons working in an insurance or reinsurance undertaking, or insurance or reinsurance intermediary, who pursue the activity of insurance or reinsurance distribution. The requirement will need to apply to: (1) the relevant persons within the management structure of such undertakings who are responsible for distribution in respect of insurance and reinsurance products and (2) all other persons directly involved in insurance or reinsurance distribution.

IDD provides no precise definition of the term “directly involved”. However, the activity of insurance distribution is defined in Article 2(1)(1) IDD as comprising the following activities:

- advising on conclusion of contracts of insurance,

- proposing conclusion of contracts of insurance,

- carrying out other work preparatory to the conclusion of contracts of insurance,

- concluding such contracts, or

- 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.

Similarly, the activity of reinsurance distribution is defined in Article 2(1) (2) IDD as comprising the following activities:  

- advising on conclusion of contracts of reinsurance,

- proposing conclusion of contracts of reinsurance,

- carrying out other work preparatory to the conclusion of contracts of reinsurance,

- concluding such contracts, or

- assisting in the administration and performance of such contracts, in particular in the event of a claim, including when carried out by a reinsurance undertaking without the intervention of a reinsurance intermediary.

Based on this, “directly involved” means to work or to supervise someone who works personally on the activities listed above. Furthermore, in accordance with Recital 28 of the IDD, a high level of professionalism and competence is generally required for distributors involved in activities preparatory to, during and after the sales of insurance policies.

Therefore, in conclusion, only those persons within the management of the concerned undertakings who are responsible for distribution in respect of insurance and reinsurance products and all other staff members performing personally insurance and reinsurance distribution activities as defined in Article 2(1)(1) IDD, are to be covered by the requirement for continuing professional training and development, based on at least 15 hours of professional training or development per year.

Disclaimer provided by the European Commission:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies, in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.