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Model Insurance Product Information Documents (IPIDs)
Background
The Insurance Distribution Directive (EU 2016/97), the IDD, comes into force on 01 October 2018. The IDD replaces the current Insurance Mediation Directive (IMD).
One of the main provisions of the IDD requires firms to provide Insurance Product Information Documents (IPIDs), which will replace key facts documents, and are mandatory for consumers.
The format (and instructions regarding content) of an IPID is set out in Article 20 of the Directive and there is little scope for variation.
The LMA, in conjunction with the Wordings Forum, has prepared model IPIDs for four of the five consumer products for which we already have model wordings, which are now also in the Lloyd’s Wordings Repository (LWR):
These four model IPIDs have been reviewed by the relevant LMA Business Panels and approved by the LMA’s Non-Marine Committee (NMC). The Overseas Home Insurance Policy (LMA3140A) IPID will follow and will look similar to the IPID for the Home Insurance Policy (LMA3127A).
Application
The new model IPIDs have been designed specifically for use with the LMA model wordings listed above.
From a discussion the LMA has had with the Financial Conduct Authority (FCA), we understand that the FCA expects a proportionate approach to the tailoring of IPIDs and does not expect widespread ‘bespoking’.
Regarding endorsements, the LMA understands that:
- endorsements which are used frequently and have a major impact should be reflected in the IPID;
- endorsement which are used infrequently could be highlighted by an appropriate reference in the: “Are there any restrictions on cover?” section.
The FCA has suggested to the LMA that the reference mentioned in the second bullet above should indicate where (page and/or section) in the schedule the endorsement(s) can be found; for example, “Endorsements may apply to your insurance. These will be shown on page 2 of your schedule.”
It is crucial to ensure that the IPIDs being used for policyholders reflect the terms of the policies used. It is important to note that should insurers amend LMA model consumer wordings in any way, insurers should ensure that the corresponding model IPID is also reviewed accordingly.
Further guidance regarding the IDD and IPIDs can be found in the LMA’s Guidance for Coverholders and within the LMA’s Consumer Wordings Guidance v.4.1.
If you have any further queries regarding the new model IPIDs, please contact Alison Colver or Steve Morrell at the LMA:
Alison Colver
Head of Wordings
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