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European Insurance and Occupational Pensions Authority

2158

Q&A

Question ID: 2158

Regulation Reference: (EU) No 2017/1469 - standardised presentation format for the insurance product information document

Topic: Insurance product information document / IPID (Art. 20 para. 7 and 8 IDD)

Article: 20

Status: Final

Date of submission: 16 Jun 2020

Question

How do we deal with the issues below?

1. If a risk (insurance policy) is built up as Co-insurance, ie. two insurance companies that share the risk, it can be 50/50, 60/40, or a similar distribution:

Should a standard IPID be drafted from both insurance companies and how should the fact that there are two insurance companies be communicated?

2. If the risk (insurance policies) is built up with a primary policy (lead), with the associated number of secondary policies:

Can one draft a single standard IPID from the primary insurance company (lead), or should the secondary insurance company/agencies also draft one?. In relation to this problem, there may be up to 20 or more insurance companies listed on the insurance policy. How should this be communicated?

EIOPA answer

Article 20(6) of the Directive (EU) 2016/97 (the IDD) stipulates that the insurance product information document (IPID) shall be drawn up by the manufacturer of the non-life insurance product. Recital 48 of the IDD further explains that an IPID should provide standardised information about non-life insurance products and that it should be drawn up by the relevant insurance undertaking or, in the Member States where insurance intermediaries manufacture insurance products, by the insurance intermediary that manufactures the insurance product.

Therefore, it should first be identified which undertaking is the manufacturer of the insurance product, regardless of the risk shared among co-insurers and who is the primary/secondary insurance undertaking, since an insurance undertaking that bears a part of the risk might not necessarily be considered a manufacturer or co-manufacturer of the insurance product. Consequently, the IPID shall be drawn up by the manufacturer of that product.

Further, where an insurance intermediary and an insurance undertaking are both manufacturers, details of the co-manufacturing partnership should be agreed in a written form as provided for in Article 3(4) of the Commission Delegated Regulation 2017/2358.

In case of co-manufacturing an insurance product, if separate IPIDs were provided for this product, several of the categories of the IPID would contain the same information e.g. payment and cancellation terms etc. which could lead to complex and overlapping information. In this case, the provision of more than one IPID would appear to be against the objectives of the IPID as the IPID is intended to be a short and stand-alone document which is accurate and not misleading and provides the customer with the relevant information about an insurance product in a comprehensible form to make an informed decision (Articles 20(4), 20(7)(a)(e), IDD). Therefore, only one IPID should be drawn up for one insurance product.

Further, in order to comply with Article 1(1) of Commission Implementing Regulation 2017/1469, in case of co-manufacturing, the co-manufacturers need to include in the IPID the names of all co-manufacturers, the Member States where the co-manufacturers are registered, their regulatory status, and, where relevant, their authorisation numbers shall immediately follow the title ‘insurance product information document’ at the top of the first page.

With regard to communicating the fact that there are two or more insurance companies, apart from including in the IPID the information related to co-manufacturers mentioned above, in accordance with Article 18(b) of the IDD, in good time before the conclusion of an insurance contract, an insurance undertaking has to make the disclosures to customers, with regard to its identity and address and that it is an insurance undertaking. This information should be provided separately, i.e. not in the IPID, since Article 18(b) covers information not encompassed in the IPID.

It should be kept in mind that when the insurance distributor carries out distribution activities in relation to the insurance of large risks, the IPID does not need to be provided.

Finally, Member States may impose stricter provisions since the IDD is a minimum harmonisation directive.