Information and advisory obligations in insurance sales – quo vadis?

As in all EU Member States, the directive for the insurance distribution (“IDD“ – Insurance Distribution Directive) by adopting the appropriate national regulations, must also be implemented in Austria by February 23, 2018. As concrete implementation measures are not yet available in Austria, a first draft law concerning this matter already exists in Germany. The discussion hereto also raises a number of questions for the Austrian implementation of the IDD, not at least also in connection with the information and advisory obligations of individual insurance distributors (including insurance intermediaries and insurance companies).

The Austrian law, in different legal matters, standardises the comprehensive information and clarification obligations for insurance intermediaries (insurance brokers and agents) as well as for the insurance companies themselves. However, according to the Austrian understanding, the active advising of insurance customers is, until now, primarily the responsibility of insurance intermediaries. Also, according to the current German law, the insurer’s obligation to provide advice should not exist if the contract has been mediated by an insurance broker or has been concluded in distance selling (eg, Internet).

According to the aim of the IDD, a consistent legal framework shall be created preferably for the direct distribution of insurance products by the insurance companies themselves, as well as for distribution by the insurance brokers. This is also borne out by the present German draft bill, which now provides for an advisory obligation also for the involvement of an insurance broker or for a distance selling.

Whether the requirements of an efficient and modern insurance distribution can be met, and how the ratio of the advisory obligations of several insurers involved in the insurance distribution will be developed, is currently being discussed intensively in Germany in the initial statements concerning the present bill for implementing the IDD. It can therefore be assumed that this discussion, also in Austria, does not go unheard. It remains to be seen whether the Austrian legislature will also decide to implement the distribution channels of all comprehensive legal advisory obligations or will pursue a different approach.