Category: Global regulation · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-05
The Insurance Distribution Directive (IDD), Directive 2016/97/EU, is the EU’s harmonised conduct of business framework governing the distribution of insurance and reinsurance products by intermediaries and by insurers acting as distributors. It replaced the Insurance Mediation Directive (IMD, Directive 2002/92/EC) and has been in force across the EU since 1 October 2018.
Category: Global insurance regulation Also known as: IDD, Directive 2016/97/EU Jurisdiction: European Union; United Kingdom (retained law) Founding instrument: Directive 2016/97/EU of 20 January 2016 Related concepts: EU insurance regulation, EIOPA, ICOBS
The IDD applies to all forms of insurance distribution, defined broadly to include advising on, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, the conclusion of such contracts, or assisting in their administration and performance. It covers brokers, agents, ancillary insurance intermediaries, and insurers themselves when distributing direct.
Key obligations include: registration of intermediaries with the home member state regulator; professional, organisational and good repute requirements; pre-contractual customer disclosure including the IPID (insurance product information document) for non-life products; conduct of business rules including the demands and needs test; product oversight and governance arrangements for manufacturers and distributors; remuneration conflict-of-interest management; and supplementary rules for insurance-based investment products (IBIPs).
The IDD is supplemented by Commission Delegated Regulations (EU) 2017/2358 (POG) and (EU) 2017/2359 (IBIP conduct), Implementing Regulations on the IPID, and EIOPA guidelines and Q&As. In the UK, the IDD is implemented principally through the FCA Handbook, ICOBS (for non-investment business) and COBS (for IBIPs), the FCA SUP and PROD sourcebooks, and the underlying Financial Services and Markets Act 2000 framework.
A UK insurance broker must hold FCA authorisation and is subject to ICOBS conduct rules, MIPRU prudential rules, CASS 5 client money rules, and the SM&CR conduct regime. The IDD’s product oversight and governance requirements are reflected in PROD 4, and now significantly strengthened by the FCA Consumer Duty (PRIN 2A) which applies from 31 July 2023 (existing products) / 2024 (closed products) and overlays a higher standard of “good outcomes” on the IDD baseline.
The IDD remained part of UK retained law at Brexit. The FCA Consumer Duty (in force 2023) is a UK-specific overlay that goes beyond IDD in requiring firms to deliver good outcomes for retail customers. The FCA has indicated that it views the Consumer Duty as a higher standard than the IDD conduct of business framework, though significant elements of the IDD (IPID, POG, demands and needs) remain in force.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
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