Michael McGrath (Cork South Central, Fianna Fail)
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108. To ask the Minister for Finance when he plans to sign the statutory instrument for the transposition of the Insurance Distribution Directive, specifically in relation to Articles 22.3 and 29.3 regarding the remuneration model; if he will await the outcome of the review by the Central Bank before implementing them; if he will avail of discretion to implement these articles until this review is complete; and if he will make a statement on the matter. [12759/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Insurance Distribution Directive (IDD) was published in the Official Journal of the European Union in February 2016 and was originally to be transposed into Irish law and apply to industry by February 2018. On 20 December 2017 the European Commission published a proposal to postpone the application date of IDD to October 2018. This proposal was subsequently amended to postpone the transposition deadline to 1 July 2018. The legislative act giving effect to this proposal was published in the Official Journal of the European Union on 19 March 2018.

IDD replaces the Insurance Mediation Directive which currently regulates point of sale insurance products and aims to further enhance consumer protection and ensure a level playing field by extending the scope of the Directive to include all sales of insurance products. It will also seek to identify and mitigate conflicts of interest in particular in the area of commissions, and strengthen administrative sanctions.

As the Deputy is aware, IDD contains a number of national discretions including in relation to the payment of commission to intermediaries provided for in Articles 22 and 29 of the directive. The area of payments of commissions is a complex one and is the subject of a review by the Central Bank of remuneration, inducements and commission payments for the sale of financial services products.

Furthermore, there is an interaction with the Markets in Financial Instruments Directive (MiFID II) which came into force on 3 January 2018, in so far as functionally equivalent or substitutable investment products can be sold under either Directive.

In order to ensure a level playing field for functionally equivalent products, I have decided to exercise part of the discretion in Article 29(3) to prohibit the acceptance and retaining of fees, commissions or non-monetary benefits from third parties in relation to the provision of independent insurance advice for insurance-based investment products.

As there is no level playing field issue with insurance products in general, the discretion in Article 22(3) in relation to such products is not being availed of at this time, but will be considered further after the Central Bank consultation on Intermediary Inducements is completed in 2018.

The necessary work to progress the transposition of IDD is continuing. In this regard, my Department is working closely with the Office of the Parliamentary Council and the Central Bank of Ireland to complete the work on the transposing regulations well in advance of the deadline of 1 July.