Everything you need to know about IDD

A blue tile showing an arm holding an umbrella, with the words insurance distribution directive

The Insurance Distribution Directive (IDD) deadline may be delayed until October. But as CII Executive Director Development, Steve Jenkins, outlined at our Client Day last week, there’s plenty to think about now. We reflect on what Steve had to say and at how, with CII, we’re helping insurers get ahead with IDD.

Let’s start at the very beginning…

The IDD can trace its roots back to financial crisis of 2008, which shook the foundations of the broader Financial Services sector.

As an industry, Financial Services organisations sit cosily in their different sectors - insurance, consumer credit, retail banking, investment banking etc. But to the big wide world these are all one and the same, or in the public’s eyes after the financial crisis, all as bad as each other.

Just as tighter regulation has swept through the rest of FS in bid to raise professional standards and restore consumer confidence, so the IDD aims to ensure a level playing field for “insurance intermediaries and insurance distribution, regardless of the channel customers use to purchase their products”, (view full article.)

Consumers are living longer, the world is a more uncertain, complicated place and finances are becoming increasingly complex. The need to access better, more professional advice to support long-term financial planning is high. The IDD helps guarantee consistent standards, honesty and professionalism in this advice.

So there’s a choice. You can look at this as another piece of regulation to grapple with, or take it as a move to genuinely try to do something in the customer interest. Of course, a good reputation with customers is essential for a healthy business.

…a very good place to start.

When you read, you begin with ABC, when you advise you begin with IDD. Ok, sorry, there was no excuse for that! But hey it’s probably either woken you up or kept you reading so… :)

The point is consumer protection has been an area of focus across EU countries since the financial crisis and Brexit isn’t going to change this. Financial advice qualifications and requirements in the UK are the most stringent in Europe. This is hugely positive from the customer perspective, not a negative in terms of getting on in the industry.

The IDD covers all General Insurance, protection and insurance-based investment products and applies to insurers, insurance intermediaries, price comparison websites/aggregators and ancillary insurance intermediaries. So even businesses such as travel agents and car hire companies who deal with insurance must comply.

Everyone who has a material impact on the customer, needs to adhere to the IDD and must be able to evidence adequate knowledge, through CPD, of products being sold, customer needs and market regulation year-on-year.

That’s why it’s really important to galvanise everyone in an organisation as to the benefits and pitfalls of the IDD, and to keep people’s knowledge up-to-date.

CPD is key to the IDD

Anyone who falls under the IDD must complete 15 hours CPD each year. This, like any other profession, must be completed in addition to, not as part of, your day-to-day job role.

IDD CPD is broken down into three areas, with employees expected to demonstrate minimum levels in each…

  1. Core knowledge - 8 hours standard for every user
  2. Product - 5 hours varying by role and organisation (specific knowledge)
  3. T&Cs - 2 hours varying by role and organisation (specific knowledge)

Firms have to be IDD compliant from 1 October 2018. But your way of achieving this, and ensuring you can evidence that everyone the IDD applies to has completed the required training/CPD each year, needs to be place in before then.

This is how Unicorn, working hand-in-hand with CII, can help.

Imagine Broker ASSESS riding in on horseback…

...a knight in shining regulatory armour ready to sweep the damsel from her IDD distress. Well imagine no more!

If you’re an ASSESS user, everything you need to meet IDD compliance is included already. If you’re not, you can get it.

A simple click-through from the homepage gives every ASSESS user assess to the three IDD elements - core knowledge, product and T&Cs – before the Wizard tool takes the stress out of finding the right role-specific learning materials and packaging it into learning pathways. For the bits specific to your firm, this could include learning using the ASSESS in-built eCreator content creation tool.

In terms of recording CPD and evidencing competency, there is integration between the CII member CPD programme and the new IDD CPD tool. CPD completed through ASSESS is automatically recorded, while hours completed outside of ASSESS can be entered on or offline into a user’s CPD log, including through the CII CPD mobile App.

A management dashboard and the tool’s reporting functions means admins can see who under their supervision has done what and when, while individuals can use the diagnostics and demonstrate knowledge to evidence competence themselves.

Those used to complying with the post-RDR 35 hours CII CPD Scheme will be familiar with completing reflective statements, drawing conclusions about what they’ve learned from their CPD. But as yet there’s no requirement for these under IDD.

For those with a retail financial advisor background, there are still questions around how the 35 RDR CPD hours and the new 15 IDD CPD hours will integrate. But don’t worry, you won’t have to do 50 hours. Regardless, CPD should always be about maintaining competence in your role, not thinking about maximum hours.

IDD isn’t easy for one function in an organisation to own - people responsible for risk and regulation must work with L&D, HR and other parts of business to ask how customer trust can be improved in the very important products they deliver. After all, even frontline staff on phones and online chat are dealing with increasingly significant and diverse issues, so everyone needs their knowledge to be up-to-date.

The IDD is part of building an insurance sector that empowers people, provides professional service for customers and delivers richer learning and development experiences for staff to create positive outcomes for all. Visit the Broker Assess site here; or contact us for more information.


Mike Bishop

Mike Bishop

Customer Success Manager

Joining Unicorn Training over 10 years ago Mike has a wealth of experience, currently one of our…

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