The majority of UK brokers have very little or no knowledge of the impending Insurance Distribution Directive (IDD), Ecclesiastical Insurance revealed last week.
The directive, described by the insurer as placing emphasis on transparency and openness, staff training and development, and pushing an industry-wide commitment to professional development, will be written into law next month. However, following pushback, its application date is set to be delayed until October 01 2018 – giving brokers six months to prepare for the changes.
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Insurance Business asked Chris Withers, broker distribution director at Ecclesiastical, about why so many brokers feel underprepared for the directive’s arrival, and what they should be doing in the coming months to get ready.
Almost half (49.6%) of brokers said that they had not had any training on the requirements of the IDD, the study found.
“Anecdotal feedback tells us that brokers feel inundated with legislative changes with GDPR coming soon too. Compliance is critical for brokers, but so too is managing the needs of their clients alongside these changes,” Withers said.
The research also revealed – somewhat surprisingly – that smaller brokers feel more prepared than their larger, national counterparts. More than a third of smaller brokers said they felt well informed or knew everything they needed to know, compared to just 25% of national brokers.
“Larger brokers may have more complex processes which will need to be adapted. They might have to roll this out over multiple locations, whereas smaller brokers can move more quickly,” explained Withers.
In the coming six months before the IDD’s arrival, brokers should be familiarising themselves with the changes, and should consider seeking guidance, the director advised.
“Processes, documentation, training and competency, and other aspects of a broker’s business will be affected by the IDD. Brokers could prepare for and implement some of the changes, such as reviewing documentation and processes, or by ensuring they update their continued professional development (CPD) before the proposed application date,” Withers said.
“They should also look out for updates from the regulator which will also help brokers keep on top of any new requirements.
“If they need to, they should seek expert external help that can ensure they have correctly understood the key issues and are taking the right actions to bring their businesses into line with the new requirements.”