The European Commission (the Commission) has given the European Insurance and Occupational Pensions Authority (EIOPA) a mandate to provide technical advice for a possible delegated act on conflicts of interest under the amended Insurance Mediation Directive (IMD). The amended Markets in Financial Instruments Directive (MiFID II), which is due to be published in the Official Journal of the EU shortly, contains amendments to the IMD in order to bring the management of conflicts of interests in insurance-based investment products into line with other financial services instruments. Accordingly, MiFID II amended the IMD to ensure that both insurance intermediaries and insurance undertakings were required to identify, manage and disclose those conflicts of interest that may arise in insurance distribution activities.
The Commission’s mandate requests that EIOPA provide technical advice with a view to the preparation of a possible delegated act that will define the steps that insurance intermediaries and undertakings might reasonably be expected to take to identify, manage and disclose conflicts of interest when carrying out insurance distribution activities and to establish appropriate criteria for determining the types of conflicts of interest whose existence may damage the interests of the customers of potential customers of the intermediary of undertaking.
The Commission’s indicative timetable suggests that EIOPA will be expected to publish its technical advice in early 2015. Six months after the delivery of this advice, the draft delegated act will be drafted and adopted. At the latest the delegated act should be in force 30 months following the entry into force of the MiFID II Directive (approximately Autumn 2016).