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

The question concerns the scope of the obligations set out in Article 10(8) IDD for insurance and reinsurance undertakings to ensure the effective implementation of the rules on professional and organisational requirements. Article 10(8), first subparagraph IDD provides that “to ensure compliance with the requirements in paragraphs 1, 2 and 3, insurance and reinsurance undertakings shall approve, implement and regularly review their internal policies and appropriate internal procedures”. The second and third subparagraphs contain additional organisational obligations (identification of a function, record keeping) for the same purpose.

It follows from the cross reference to “paragraphs 1, 2 and 3” that internal policies and procedures and other measures to be adopted by insurance and reinsurance undertakings must be approved, implemented and regularly updated in order to ensure compliance with all requirements imposed upon insurance and reinsurance undertakings under Article 10(1) to (3) IDD. 

Article 10(1) to (3) IDD essentially sets up obligations for natural persons working as insurance or reinsurance intermediaries or employees of insurance or reinsurance undertakings. However, paragraphs 2 and 3 contain also specific obligations for insurance and reinsurance undertakings which are in both cases optional for Member States.

Article 10(2) fourth subparagraph IDD allows Member States to require “that in the cases referred
to in the third subparagraph of Article 3(1) and with regard to the employees of insurance or
reinsurance undertakings who are engaged in insurance or reinsurance distribution, the insurance
or reinsurance undertaking … is to verify that the knowledge and ability of the intermediaries are in
conformity with the obligations set out in paragraph 1 and, if need be, is to provide such intermediaries
with training or professional development means which correspond to the requirements concerning
the products sold by the intermediaries”.

Article 10(3) second subparagraph IDD contains a similar provision that gives Member States the
possibility to allow insurance and reinsurance distributors (i.e. insurance and reinsurance
intermediaries and insurance and reinsurance undertakings), in accordance with the third
subparagraph of Article 3(1), to check the good repute of their employees and, where appropriate,
of their insurance or reinsurance intermediaries. 

The third subparagraph of Article 3(1) IDD provides that “Member States may stipulate that insurance and reinsurance undertakings … may cooperate with the competent authorities in registering insurance and reinsurance and ancillary insurance intermediaries and in the application of the requirements laid down in Article 10”. It follows that the obligations for insurance and reinsurance undertakings under Article 10(2) fourth
subparagraph and Article 10(3) second subparagraph IDD concern the following groups of
insurance distributors: 
a) insurance and reinsurance intermediaries for the registration of which the insurance or
reinsurance undertaking cooperates with the competent authorities pursuant to Article 3(1)
third subparagraph IDD, where the relevant Member State has made use of the options in
Article 10(2) 4th subparagraph, 2nd sentence and Article 10(3) 2nd subparagraph, and

b) employees of the insurance or reinsurance undertaking who are engaged in insurance or reinsurance distribution.

Consequently, the organisational obligations for insurance and reinsurance undertakings set out in Article 10(8) IDD apply not only with respect to their employees, but to both of the above-mentioned groups of insurance distributors.

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.