Maltese MEP Alfred Sant has asked EC Vice-President Valdis Dombrovskis to reconsider the application of a one-year delay for the implementation of the Insurance Distribution Directive legislation for a period of twelve months as requested by the Maltese industry. Dr Sant intervened on behalf of ‘The Malta Insurance Association’ who earlier this week appealed for interventions on their behalf with the Commission to delay the implementation of the Insurance Legislation stressing the lack of time for the correct implementation of the Insurance Legislation which has been adopted by the EC last week.
The Insurance Distribution Directive (IDD) aims to establish the conditions necessary for fair competition between distributors of insurance products and to create more opportunities for cross-border business.
The Maltese MEP said he was confident Dombrovskis will agree that in the insurance sector, it is just and proper that the legitimate interests and reasonable claims of insurance providers in Malta be taken into account.
The Maltese MEP said all players in the insurance sector do not oppose the changes in any way but they are pleading that they need more time. It is of utmost importance for these changes to be uniformly implemented across Europe, without creating discrepancies among companies in different Member States and of different size. Only a realistic transposition period would allow this.
“I am confident that you will agree to this proposal given your commitments to the improvement and enhancements of SMEs in Europe.” Alfred Sant told Dombrovskis.
Sant had already highlighted the concerns of the Insurance industry, in particular from Malta during the ECON Committee of the European Parliament on 20 June of this year. He had stressed with Mr Valdis Dombrovsksis that the Commission’s timeline for the finalisation of the delegated acts would leave too little time for the Member States and their insurance sectors for their implementation.
In his letter, he recalled that “in the course of that hearing, I pointed out that the Commission’s timeline for the finalisation of the delegated acts would leave too little time for the Member States and their insurance sectors to implement on the ground, the updates of the Insurance Distribution Directive by 23 February 2018, creating difficulties related to the legal certainty to effectively transpose the rules into the national legislation. Particularly badly hit by this approach will be SMEs in insurance, which predominate in Malta, but not only there.
"Therefore, I called upon the Commission to consider a possible postponement of the implementation deadline. In your reply to my question, even if you had agreed with me on the very ambitious nature of the timetable set in the legislation, you expressed strong opposition to a possible postponement arguing that this would send the wrong signal to the sector.”
Sant said that now that the EC has adopted the delegated acts, the difficulties, then already forecasted by the Insurance sector, have materialised. Many insurance companies and associations raised this problem, not only from Malta, but also from other Member States.
The Insurance Distribution Directive affects the entire distribution chain for insurance products, with many different stakeholders involved, and necessitates significant changes, mainly for SME operators. The industry will need to revise and adapt existing processes and policies, while designing and implementing new ones in a number of different areas. Even the IT systems will have to be changed in order to support the changes in the processes that the legislation requires, with significant costs for the companies, the Maltese MEP told the EC Vice-President.