The Impact and Challenges of the Insurance Distribution Directive (IDD) on Maltese Insurance Undertakings

Purpose: With this paper the authors bring to light the impact and challenges of the Directive on the Maltese insurance undertakings. To this effect, a comprehensive examination is conducted on the insurance undertakings in Malta. Literature deals with the regulation of the single European insurance market and what led to the introduction of the Insurance Distribution Directive. Design/Approach/Methodology: To this effect, a comprehensive examination is conducted on the insurance undertakings in Malta. Literature deals with the regulation of the single European insurance market and what led to the introduction of the Insurance Distribution Directive. Furthermore, the salient requirements of the Directive are analysed. Findings: Data analyses suggest that local insurance undertakings will be facing challenges to their business model, selling practices and distribution network. In addition to the above, moderate to high costs are expected in relation to administration and training. Practical Implications: With no delegated acts yet and the limited communication issued in relation to the transposition of the Insurance Distribution Directive into local legislation/regulation, insurance undertakings have little time to fully prepare for the adaptation of the new requirements. Originality/Value: Although, all States might be represented in the decision process, the larger, than Malta, states usually take over and sometimes dictate the final decision. The concept of proportionality in regulations is not clean and is not effectively managed, at the disadvantage of the smaller states. Therefore, this paper is important since it voices the cries of smaller states and allows for an understanding of the impact and implications of new regulations to smaller jurisdictions, in this case within the EU.