Professional requirements (Art. 10 IDD)

Many thanks for your email of 5 April in which you raise questions regarding the professional indemnity insurance laid down in Art. 10 (4) of the IDD. The insurance cover should offer a professional indemnity against liabilities arising from professional negligence for include any kind of costs/detriment of the customers caused by the insurance intermediary. This typically includes costs for claims, legal fees and subsequent legal remedies, if these costs have to be borne by the customer or by any party injured as a result of intermediary negligence. All costs on the side of the insurance intermediary are not covered as they would reduce the amount available for the protection of the customers. Whereas the IDD only requires re-/insurance intermediaries to hold a professional indemnity insurance with a harmonised minimum amount, it is the national law of the respective Member States which determines under which circumstances an intermediary is liable and for which damages. It should further be noted that the base amounts as laid down in Article 10 paragraph 4 IDD have to be regularly reviewed by EIOPA in order to take account of changes in the European index of consumer prices. In June 2018, EIOPA submitted draft regulatory technical standards with an adaptation of the base amounts to the European Commission and these will be incorporated into a Delegated Regulation by the European Commission. For further details, please see https://eiopa.europa.eu/Publications/Letters/EIOPA-18-413%20Draft%20RTS%20for%20PII.PDF.