IDD & AssurMiFID in Belgium
Howden Belgium, its senior staff and employees are obliged to comply with the “AssurMiFID/IDD-rules of conduct”, as stipulated in the law of 6 December 2018 implementing the European Directive (EU) 2016/97 of January 20, 2016 on insurance distribution (“IDD Directive”), replacing as of December 28, 2018 in the Insurance Act of April 2, 2014 the chapters regarding (1) sales through insurance intermediaries and (2) the rules of conduct of the AssurMiFID Royal Decree of February 21, 2014. The law was further implemented by a Royale Decree dated 18 June 2019.
The scope of the MiFID rules of conduct have, since May 2015 been extended to the insurance sector in Belgium (commonly known as the "AssurMiFID regime"). As a result, many of the IDD rules were already more or less applicable to insurers and insurance intermediaries active in Belgium. Therefore, the impact of the IDD on the Belgian market is somewhat more limited when compared to other Member States.
Although the IDD is aimed at minimum harmonization, allowing Member States to maintain or introduce more stringent provisions, the Belgian legislator has decided to implement the IDD as literally as possible. For a number of aspects, however, the Belgian legislator has decided to make use of the options in the IDD in order to take into account the specific characteristics of the existing AssurMiFID regime in Belgium.
While the AssurMiFID regime did not foresee a possibility to differentiate between retail or professional clients, the IDD grants the option to Member States to allow for such differentiation. The Belgian legislator decided to make use of this option, by allowing insurance distributors to make a distinction between professional and retail clients. Certain information (such as regarding the remuneration, yearly reporting to clients, the suitability and appropriateness test, …) will not have to be provided to professional clients. The Act clarifies which information should be given to professional clients regarding their categorization, and states that professional clients have the right to ask to be treated as a non-professional client.
Howden Belgium will make sure that all senior staff and employees respect the aforementioned applicable Belgian regulation, including but not limited to:
1) Duty of Care and Needs
Howden Belgium must gather sufficient information from its clients so that a correct assessment can be carried out regarding their needs and demands. This allows us to offer products that are a suitable solution for these needs and demands. Changed needs, new demands or risks occurring during the term of the insurance policy will be valuated and, where required, the policy will be amended.
2) Conflict of interest
Conflicts of interest may occur between Howden Belgium (or the group to which Howden Belgium belongs) and clients, or between its clients amongst each other when for example:
- Howden Belgium receives payments or benefits from insurance companies;
- Howden Belgium allocates to its staff variable payments, incentives or remunerations in proportion to commercial targets;
- the interests of different clients of Howden Belgium where their respective interest in a particular case may be different (e.g. in case of a claim involving 2 or more clients of Howden Belgium).
If, exceptionally, a conflict of interest should nevertheless arise during the performance of our services, we apply strict rules to preventively identify any conflict of interest and all measures will be taken to prevent or avoid a conflict of interest. Howden staff needs to respect the internal procedures and rules based on which Howden Belgium expects its staff to make every effort at all times with regard to client’s interests while respecting applicable legislation and regulations. We will communicate with the client in an appropriate manner and keep an updated register of potential conflicts of interest.
Howden Belgium will always be transparent vis à vis its clients in respect of any remuneration it obtains directly and indirectly on business it handles for its clients.
Our General Conditions outline the following:
“Howden Belgium's remuneration consists of a fee, or a commission calculated on the basis of the premium of the insurance contract. Other elements of compensation may include: claims settlement brokerage, recovery fees, interest income, and additional remuneration from insurers for services rendered to their benefit.
Furthermore, Howden Belgium can charge policy and administration costs to its clients, which depend on the amount of the premium and/or commission.”
Any remuneration we receive from the insurers (e.g. brokerage, portfolio commissions) cannot be detrimental to the interests of the client. With regard to non-monetary benefits such as meals or sporting, educational or cultural events offered by insurers, Howden Belgium sticks to the legal provisions and its own policy related to conflicts of interest. These invitations will, therefore, only be accepted if they are deemed beneficial for the services provided to the client. Howden Belgium will never accept that hotel expenses are paid by insurers in favour of our employees.
On an international level, Howden Belgium may appeal to other Howden offices (e.g. London, Singapore, Düsseldorf), which means that part of the fees or commissions that Howden Belgium receives are ceded to or are shared with those Howden entities that are involved in the placement of a specific business.
4) Record keeping
Howden Belgium keeps a detailed digital client file that contains a.o. the following:
- Needs and risk analysis;
- Market survey with details of proposals;
- Insurance policies / cover notes (including general and specific terms and conditions);
- Policy / cover note endorsements;
- Emails, letters and communication with the client about coverages, premiums, limits or loss occurrences;
- All loss statistics;
- Service Level Agreement (SLA) with the client;
- Client complaints and replies to complaints.
Al these documents and data will be stored and kept safe in line with applicable privacy legislation (GDPR).