Currently there is discussion whether provisions of IDD (exemption form the application of IDD) can be interpreted in the way that it applies also to such insurance products as MTPL and Motor insurance (CASCO).

The answer to this question is provided by the European Commission.
Motor third party liability (MTPL) insurance is compulsory insurance against civil liability in respect of the use of motor vehicles based on Directive 2009/103/EC (Motor Insurance Directive). It is often combined with so-called motor casco or vehicle own-damage insurance, which is a voluntary comprehensive insurance covering the motor vehicle against various risks such as fire, natural disasters, theft of the vehicle or the equipment installed therein, breakdown as a result of collision with another vehicle or object on the road, etc. In principle, ancillary insurance distributors, such as car dealers, can distribute both insurance products. However, there are certain conditions to be observed, as follows:
‘Ancillary insurance intermediaries’ are defined in Article 2(1) point 4 IDD as natural or legal persons who, for remuneration, take up or pursue the activity of insurance distribution on an ancillary basis, provided that (1) their principal professional activity is other than insurance distribution, (2) they only distribute “certain insurance products that are complementary to a good or service” and (3) the insurance products distributed by them “do not cover life assurance or liability risks unless that cover complements the good or service which the intermediary provides as its principal professional activity”. It follows that, as a form of liability insurance, MTPL insurance can only be distributed on an ancillary basis if it covers a motor vehicle sold by the ancillary insurance intermediary as its principal professional activity. This means that practically only car dealers and other professional providers of motor vehicles can act as ancillary insurance distributors for MTPL insurance products.
Article 1(3) IDD exempts certain ancillary insurance intermediaries from the scope of the Directive if (among other conditions) they distribute insurance products that are complementary to the good or service supplied by a provider and cover either (i) the risk of breakdown, loss of or damage to the good or the non-use of the service supplied by that provider or (ii) damage to or loss of baggage and other risks linked to travel booked with that provider.
Against this background, ancillary insurance intermediaries who offer their customer an insurance coverage on a sale of a car fall within the scope of the Directive provided the insurance coverage includes MTPL insurance, since the exemption clause in Article 1(3) IDD does not include insurance against liability risks. Such intermediaries have to register as ancillary insurance intermediaries under IDD and must comply with the IDD rules applicable to them.
On the other hand, car dealers may be exempted from the scope of IDD under Article 1(3) if they limit their offer to motor casco insurance products covering the risk of breakdown, loss of or damage to the car sold, provided that all the conditions set out in Article 2(1) point 4 and Article 1(3) IDD, in particular the limit amount provided in Article 1(3) point (b), are complied with.
In any event, where the exemption of Article 1(3) IDD applies, Article 1(4) IDD also has to be complied with. This provision provides additional obligations on ancillary insurance intermediaries distributing insurance products, despite being exempted from the scope of the IDD. In particular, under Article 1(4)(b) IDD, insurers and insurance intermediaries that carry out a distribution activity through an exempted ancillary insurance intermediary, are responsible for compliance with Articles 17 and 24 IDD, and for considering the demands and needs of the customer before the proposal of the contract.
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.