IDD rules of conduct: fifty shades of advice
‘Insurance advice? A subtle dance between regulatory requirements and reality on the ground’.
On 24 April, Paula Leite, Managing Partner at VINCEO Solutions and trainer for APCAL, will be leading a much-anticipated session on the advisory obligations applicable to the distribution of IBIP in LPS to French clients. Ahead of the session, she shares with us a few key points from her recently published article “50 shades of advice”.
📰 Paula, why this intriguing title, ‘50 shades of advice’?
I wanted to highlight, with a touch of humour, the existence of different practices and methods of providing advice in the field of insurance distribution at European level. The rules of conduct and obligations may vary from one Member State to another, depending on whether advice is compulsory or not, for all products or for certain products, depending on the options chosen by the Member States when transposing the IDD Directive.
📌 What are the key lessons for a Luxembourg broker?
Firstly, the IDD does not make advice compulsory. Providing advice is part of the business of insurance distribution.
That Luxembourg makes advice compulsory if the customer has his habitual residence or establishment in the Grand Duchy of Luxembourg, unless the customer waives this advice.
That Luxembourg impose an impartial and personalised analysis for Luxembourg brokers.
Finally, it’s important to remember that advice doesn’t stop when you take out a policy: it’s a long-term process.
Finally, it’s important to remember that advice doesn’t stop when you take out a policy: it’s a long-term process.
🌍 And in a cross-border situation, as for French customers?
In principle, a Luxembourg distributor of insurance products carrying on business in a Member State other than Luxembourg, whether under the freedom to provide services or the freedom of establishment, must comply with the stricter rules and, more generally, the so-called general interest provisions adopted by that other Member State.
French regulations provide for three levels of advice (levels 1 to 3). Level 1 advice is compulsory in all cases of distribution. Level 2 is optional if the distributor is able to present the customer with several contracts (or investment options within a contract). Level 3, optional, if the distributor is able to carry out an analysis of a number of contracts, from different producers, in such numbers and of such a nature as to be representative of the contracts offered on the market.
In practice, a Luxembourg distributor distributing IBIPs in France will have to adapt its sales process to take account of these three conditions and its status!
📅 Will the training course on 24 April cover these nuances in detail?
Absolutely. First of all, we will review the rules of conduct set out in the IDD, the rules of conduct as they result from the transposition of the IDD into Luxembourg law. We will then review the pre-contractual obligations under French law, and of course the practical implications of the Green Industry Act and the ACPR recommendation that comes into force at the beginning of 2026.
My aim is, on the one hand, to provide a clear and operational understanding of the various regulatory frameworks and, on the other, to offer practical keys to ensuring compliance in a cross-border context.
📩 Any final words for brokers?
sultancy is more than a regulatory obligation: it’s a strong commitment to the customer, guaranteeing personalised support and a value-added service.
💼 Read the full article. And to find out more, sign up for the training course on 24 April!
To find out more on the subject, we invite you to read Paula Leite’s full article, available by clicking on the image below!
And for more information, don’t hesitate to contact APCAL at info@apcal.lu
Paula Leite is a Managing Partner and consultant at VINCEO SOLUTIONS S.A., a Luxembourg-based consultancy firm that mainly supports professionals in the insurance sector (insurers and insurance intermediaries) through tailored approaches in the areas of consulting and training.
Before setting up VINCEO SOLUTIONS in May 2020, she held a number of positions with a number of insurers in the Luxembourg market, notably in product development, business development and wealth planning, as well as in strategic and operational marketing.
Paula has worked in the Luxembourg life insurance industry since 1998. Drawing on her extensive experience, she now works on issues relating to product and market development, the development of the product and service offering, regulatory compliance, marketing and communication and the optimisation of operational processes.