New insurance directive delayed
Solicitors will not need to comply with the new European Insurance Distribution Directive until later this year, we have confirmed.
The Directive, which strengthens protections in place for clients of law firms, was due to be applicable from 23 February 2018 but has now been delayed until at least 1 October. This could move further depending on discussions between various European organisations. A revised timetable will now be voted on by the European Parliament on 1 March.
The Directive will mean firms carrying on insurance distribution activities will need to change the way they work. Firms working in personal injury and conveyancing or probate are most likely to be affected as, for example, they might arrange after-the-event insurance in a personal injury matter or defective title insurance in a conveyance.
There might be other insurance products that firms advise on, or arrange for their clients, to which this will apply. All firms should assess their own individual practices to see if the new directive impacts upon them once it comes into force.
We consulted on revised scope and conduct of business rules late last year in readiness for the new Directive.
We will continue to work with the Financial Conduct Authority to agree the draft rules in the meantime.