Brussels, 22/09/2000 (Agence Europe) - The European Commission this week adopted a draft directive on insurance brokers. The aim is double: to make them benefit from true freedom of establishment and provision of services in the European Union and ensure a better level of protection for their clients. Once adopted by the Council, the text will replace a 1977 directive to become the unique Community text, a binding text, to be applied to this profession.
Due to the diversity of insurance policies available, the insurance intermediaries may play a key advisory role for consumers: in several Member States, their market share in the distribution of insurance exceeds 50%. Nonetheless, the absence of a European legal framework for this profession (contrary to that existing for insurance companies strictly speaking) prevents it from providing services from one country to the next within the European Union. Also, although the European insurance market is beginning to take effect for covering the major industrial and commercial risks, this remains less true for the covering of risks for individuals. Insurance intermediaries often find it impossible to meet the requests of a client who wishes to insure a risk in another Member State, notes the European Commission. With its proposal, it plans to remedy this situation.
In order to guarantee "a high level of professionalism", the Commission proposes a system for the registration of insurance brokers. With compliance to certain conditions (professional aptitudes, worthiness, financial capacity, etc.), they should register in their country of origin, and could then operate throughout the Union. The directive proposes minimum criteria to be respected, each State remaining free to adopt stricter provisions for brokers registered nationally. The European Commission is also seeking to establish more transparent relations between the broker and the clients. In particular, it plans to require from the former a declaration to the clients stating whether he/she works solely with certain insurance firms or whether his advice is based on the analysis of all the products available on the market.