Insurance Europe welcome repeal of DMD

Insurance Europe has published a set of key messages regarding the repeal of the EU’s Directive on Distance Marketing of Consumer Financial Services (DMD), pleasing for transferring its remaining provisions to more recent sector-specific EU legislation, such as the Insurance Distribution Directive.

Insurance Europe has stressed out that it is also important for policymakers to:

  • Ensure legal certainty and avoid duplication of requirements, such as disclosures, should the remaining provisions be transferred to the Consumer Rights Directive.
  • Avoid unintended detrimental consequences resulting from the introduction of a new withdrawal button, as, for example, consumers may find themselves inadvertently uninsured. On the other hand, abuse of contract withdrawals could increase, whereby contracts are terminated after the risk of loss has passed without occurring.
  • Remove the requirement for pre-contractual information at least one day before the time at which the consumer is bound by any distance contract. This is at odds with consumers’ expectations of speedy and easy purchasing processes in an increasing digital world, and their need for immediate insurance coverage, for example when travelling or renting a car.
  • Remove the requirement to always be able to obtain human intervention as it would not be compatible with digital developments. For example, chatbots are available 24/7 and requiring human intervention to also be available 24/7 would be extremely burdensome.
  • Provide insurers with sufficient transposition time: for example, a minimum of six months from the end of the implementation period.
  • A sufficient transposition period should be included in the Directive, such as a minimum of six months from the end of the implementation period, since it requires changes to IT systems and updates to materials and processes.