Regulation update: IMD II

This is the first of what I hope will be a regular series of articles on European regulation.

What I will try to do is set out some of the background, and introduce names and acronyms that crop up when discussing this subject.

Most insurance brokers’ and intermediaries’ main European focus is on the Insurance Mediation Directive (IMD).

This directive is currently being ‘recast’ (amended) and the process involved is generating plenty of interest.

Solvency II prompt

The recast process is lengthy, having being kick-started by a simple addition to proposed Solvency II text some five years or so ago. The European Commission, via its Internal Markets Directorate, then started work on the recast.

This involved a team, led at the time by Karel Van Hulle, engaging in regular discussions with a variety of stakeholders, including Bipar (the European Federation of Insurance Intermediaries), in which Biba plays an active role.

Bipar’s directors’ committee has met every other month for more than four years, with an agenda largely dominated by the IMD recast, preparing Bipar for the time when lobbying on the wording of the recast would start.

Legislative process

The Commission published a consultation paper and held a public hearing in Brussels in 2011 before releasing its recast text in July 2012. Once released, the text entered the EU legislative process.

This process involves the EU Council of Ministers and the European Parliament. These bodies separately and independently scrutinise, discuss and amend the text to produce their own versions.

Once both have a text, they sit down in ‘trialogue’ with the EU Commission, and all three parties negotiate and horse-trade to reach a final agreed text.

State of play

So where is the Commission’s text in the process now?

Put simply, it is getting bogged down under the sheer weight of legislation under discussion at EU level. The timetable is taken up with banking union, Omnibus II, Solvency II, MIFID II [Markets in Financial Instruments Directive] and others, with ‘our’ IMD recast towards the back of the queue.

The current Lithuanian presidency has no meetings timetabled to discuss IMD II, so a final text at EU Council level is unlikely this year’

The current Lithuanian presidency has no meetings timetabled at present to discuss IMD II and so a final text at EU Council level is unlikely this year.

The EU parliament has managed to dedicate some time to IMD II and it is possible they will agree a text later this year. However, without a final Council text, the trialogue cannot start, and so the wait for a definitive IMD recast text is likely to go on into 2014.

In my next article, I will give any update to the timetable and explore the parliamentary process in a little more detail.

Steve White is chief executive of Biba