United Kingdom


  • Industry: Financial Services, Insurance
  • Type: Press release
  • Date: 26/02/2014

KPMG expresses disappointment at further IMD2 delays 

  • Directive referred back to trilogue


  • Consistency with other directives needs to be ensured



Although the Insurance Mediation Directive 2 (IMD2) was covered in this morning’s European Parliament plenary session, a vote to approve the latest redraft was deferred.  The directive will now be considered alongside a package of other directives, including the revisions to the Markets in Financial Instruments Directive (MiFID2) and Key Information Documents Directive (KID) that will apply to all investment products. As a result, the timing of the directive is now unclear. 


Jane Portas, insurance partner at KPMG, commented: “Whilst appreciating the need to ensure a level playing field in the sales of all financial products and not solely those within the insurance sector, these delays will mean UK insurers will continue to operate to a higher standard than much of the rest of Europe.  The UK implementation of the original IMD was extended to selling by direct insurers, and the revisions in IMD2 would have led to this applying to all Member States.  In order to ensure a level playing field, it is important that the package of directives is approved early in the next parliamentary session.”


Key features of the current IMD2 proposals that will impact both UK insurers and intermediaries include:


  • Minimum harmonisation approach will leave scope for Member State overlays;


  • Commission and remuneration disclosure limited to broad terms, with monetary disclosure only for life insurance investment products


  • Requirement to offer individual components of insurance policies separately where this in the consumer’s interest; and


  • Introduction of alternative dispute resolution mechanisms.



Portas continued, “Although the mandatory commission disclosure proposals have been relaxed, individual member state regulators will still be allowed to impose stricter requirements than those stipulated in the directive, meaning that those wishing to passport will need to be aware of local overlays to the core requirements.


“The proposed requirement to offer separately the various components of bundled or tied insurance products will need further refinement. Clarity will be required regarding the distinction between a component and a feature, and it is unclear at this stage whether both will be caught. This has the potential to increase the level of premiums or reduce cover as policyholders question the costs of each component, which could end up detrimental to policyholders.  Similarly, the Financial Ombudsman Service (FOS) has offered a good level of consumer protection over the years, and it will need to be ensured that the new alternative dispute resolution mechanisms do not undermine this.




Notes to editors:


For further information please contact:


Simon Chan, PR Assistant Manager, KPMG

Tel: +44 (0) 207 694 2024

Mobile: +44 (0) 7747 564 737

Email: simon.chan2@kpmg.co.uk


KPMG Press Office: 020 7694 8773


About KPMG


KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.



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