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The IDD, vets and pet insurance

What is the Insurance Distribution Directive and how will it impact veterinary practices?

20 October 2018, at 1:10pm

Well, the GDPR arrived, the sun rose as normal on 25 May and the avalanche of people demanding to be forgotten was more like a light flurry – despite the media hype and despite the “consultant”-fuelled paranoia.

And so to the next EU dictate. The Insurance Distribution Directive (IDD) seeks to further harmonise how insurance distribution activities are regulated across the single market. The changes that came into effect on 1 October 2018 will have implications for the way UK veterinary practices work with pet insurance.

Through various consultation papers, the UK regulator, the Financial Conduct Authority (FCA), has provided guidance that requires some enhancement to the current “in-scope” or regulated Appointed Representative (AR) model embraced by many vets.

They also reveal and clarify additional opportunities for practices wishing to remain non-authorised and work outside the regulatory perimeter.

Agria’s solutions

As an integral part of Agria’s new practice development initiative, Agria life, we have been in discussions with the FCA and working closely with specialist regulatory consultants to embrace IDD and craft a range of innovative “in- and out-of-scope” insurance solutions for vets.

These are designed to make veterinary promotion of lifetime pet insurance as easy and effective as possible, while giving practices the freedom to work with Agria in a way that’s right for their business and their clients.

Out-of-scope/non-regulated activity

Passive introducing means practices can continue to generically talk about insurance and the different types of cover, display posters and other point of sale material, and with Agria, distribute leaflets that include free five-week cover for the owner to activate.

Providing information was previously a regulated activity and is now included in the “provision of information” exclusion, meaning practices can share client and pet data with Agria for Agria to activate a free five-week policy – on the proviso of course that the client has consented to their information being disclosed in line with GDPR requirements. Vets working out of scope still can’t recommend a specific product or provider, however.

In-scope/regulated activity

Despite rumours from some quarters to the contrary, the Appointed Representative status still very much exists for vets under the new regulatory regime and is absolutely available for Agria vets, and those vets who still wish to support their owners in making an informed choice about pet insurance.

The status now includes an annual requirement of 15 hours of CPD for practice staff involved in insurance distribution, which dovetails perfectly with the introduction of Agria life.

Once trained, staff can recommend Agria, discuss specific features of Agria’s products and, importantly, the practice can activate Agria’s free five-week insurance policies for clients.

Misconceptions and possible unsafe assumptions

The Connected Contract exemption is used by Agria when working with dog and cat breeders as they sell the “connected” product – a dog or cat.

Obviously Agria was keen to extend this solution to vets if appropriate; however, on approaching the FCA, it has been confirmed that currently, and under the impending IDD, this exemption is “unlikely to apply for the activity that vets undertake”.

Introducer Appointed Representative is a regulatory status with a more limited remit than AR.

One of the two key regulated activities it facilitates is providing information. With this activity being deregulated under the provision of information exclusion, it is debatable what additional benefit this lesser regulatory status offers vets promoting insurance.

2018 has been peppered with much misinformation about IDD and several false dawns for practices desperate to continue to promote insurance after 1 October. Agria’s options offer every practice a straightforward, practical solution to optimise the promotion of lifetime pet insurance, underpinned with the opportunity to access a free, comprehensive programme of business and individual training and development.

For more information about working with Agria, visit: agriapet.co.uk/vets

Managing Director at Agria Pet Insurance

Simon Wheeler joined Agria Pet Insurance in 2009. He has 30 years’ experience in the pet insurance industry and is a previous Chairman of the ABI’s pet insurance committee. Simon is responsible for long-term top and bottom line company performance.

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