IDD (Insurance Distribution Directive)

Definition

The Insurance Distribution Directive is Directive (EU) 2016/97 of 20 January 2016, applied across the EU since 1 October 2018 and retained in UK law after Brexit through the FCA Handbook (ICOBS, SYSC and the training and competence rules). It replaced the 2002 Insurance Mediation Directive and covers every distributor, including insurers selling direct. Its core requirements: act honestly, fairly and professionally in the customer's best interests; establish the customer's demands and needs before proposing a product; provide a standardised Insurance Product Information Document for non-life products; disclose the nature of remuneration; complete at least fifteen hours of professional training per year; and apply product oversight and governance rules.

What you need to know

For a European brokerage using WhatsApp, the IDD matters at three moments of the client journey.

Before the sale, the demands-and-needs assessment (Article 20) must be documented. If a client asks for a quote on WhatsApp and the broker replies with a recommendation, the questions and answers are part of the advice file. Keeping them in a client record rather than on a personal handset is what makes the file complete.

At the point of information, Article 23 sets the rules on the medium: paper by default, or a durable medium or website when the client has chosen it and can retrieve the document later. Sending the IPID as a WhatsApp attachment is acceptable only within those conditions, and the brokerage should be able to prove the document was sent.

After the sale, the duty to act in the client's best interests shapes renewals and cross-sell messages. A campaign that offers a product without any link to the client's situation sits uneasily with the directive; a segmented message based on a known gap in cover does not. In the UK, Consumer Duty reinforces the same logic with its consumer-understanding and fair-value outcomes, as discussed in the Consumer Duty inbox guide. The compliance hub covers related rules.

Concrete example

A Dublin brokerage receives a WhatsApp message from a small-business client asking whether to add business-interruption cover. The account handler asks about turnover, premises and suppliers, proposes two options and attaches the IPID for each. When the Central Bank of Ireland later reviews the firm's files, the full exchange, the documents and the client's choice are exported from the client record in minutes.