The European Commission has written to the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) requesting advice on how the Insurance Mediation Directive (IMD) might be revised.

The IMD sets out the principles of the single European passport and basic standards of consumer protection in the area of insurance intermediation. Its aim is to facilitate the freedom of establishment and the freedom to provide services in relation to intermediaries.

European Member States had until 15 January 2005 to transpose the Insurance Mediation Directive. Although the UK implemented on time, a number of EU countries took several years to introduce the new regime. In April 2006 the Commission was obliged to take action against Germany, France, Malta, Spain and Portugal for failure to implement the IMD.

As the Commission acknowledges in its letter to CEIOPS, minimum harmonisation requirements have resulted in wide divergence in how the IMD has been implemented across the EU. Furthermore, certain Member States' "gold-plating" of implementation requirements (such as those introduced under the FSA regime), as well as the different national requirements applied under the "general good" provisions, have created obstacles to the functioning of the single market for insurance and reinsurance intermediaries.

The aim of the revision of the IMD (which the Commission calls "IMD2") is to improve legal certainty and clarity.

The Commission has requested that CEIOPS provide advice on whether the revised directive should be a Lamfalussy framework directive, allowing greater regulatory flexibility. In addition, the Commission has asked CEIOPS to consider the scope of IMD2 so that a distinction might be made between the selling of investment products packaged as life policies and more general insurance products.

CEIOPS will also consider the extent of harmonisation in terms of professional qualifications for those selling insurance products and how the notification system for those selling insurance on a cross-border basis might be improved. The review will have to consider how "general good" provisions currently operate across the EU. This principle allows additional regulatory measures to be imposed by a host state if they serve a "general good".

Following on from the insurance business sector inquiry undertaken in 2006/2007, the Commission has also asked CEIOPS to consider remuneration transparency. As the Commission plans to adopt clear rules on conflicts of interest and transparency in relation to the distribution of investments packaged as life insurance policies, CEIOPS is requested to propose high level principles for the effective management of conflicts, taking into account differences between investment and general insurance products. In addition, CEIOPS should consider how greater transparency can be introduced in the manner in which non-investment product intermediaries are remunerated.

Further, the Commission has asked CEIOPS to consider ways to reduce the administrative burdens caused by the implementation of the IMD and to consider whether there are any areas of the current regime which have proved to be too costly compared with the intended objective and benefits.