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Outsourcing in the insurance distribution arena: some thoughts from the Spanish perspective

27/07/2022

It is widely understood that the European Union (EU) Insurance Distribution Directive (IDD) was an important step in consolidating and harmonising the rules on the distribution of insurance products across the EU.

While Solvency II rules introduced specific provisions which regulated outsourcing for insurance undertakings, the IDD is completely silent on outsourcing by insurance distributors. At the level of insurance undertakings, this legal gap is easily filled by the Solvency II rules, because, as with other insurance distribution rules, insurance undertakings must be governed by the Solvency II rules (eg, when conducting cross-border activities). However, insurance intermediaries have no such advantage, and they are bound by national regulations concerning the outsourcing of functions. This has both advantages and disadvantages.

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