In a recent webinar (titled “Scoping out the rules: insurance distribution dos and don’ts for Solicitors”) hosted by Jonathon Bray with Rachael Eyre, Ed Marshall, and guest panellist John Pennie from Marsh Insurance Brokers, participants delved into the intricacies of the Insurance Distribution Directive (IDD) and its implications for solicitors. This post summarises the main insights and takeaways from the presentation, offering solicitors practical guidance on adhering to the IDD’s requirements.
A recording of the session is available to COLP Insider subscribers.
You may also be interested in the post Insurance distribution: A summary of the rules for law firms.
Introduction to the IDD
The webinar commenced with an introduction to the IDD, underscoring its significance as a regulatory framework aimed at enhancing consumer protection within the insurance distribution sector. Solicitors, often finding themselves at the intersection of legal advice and insurance distribution, face a unique set of challenges and responsibilities under the IDD. The directive encompasses a broad range of activities, including advising on, proposing, and carrying out work preparatory to the conclusion of insurance contracts, highlighting the extensive reach of the IDD within legal practices. Litigators, property lawyers, private client practitioners and corporate professional are all likely to be caught by the IDD.
Insights from the industry
John Pennie, with his extensive background in insurance brokerage and legal practice, shared invaluable insights into the IDD’s practical implications. One of the critical takeaways was the potential negligence or breach of professional duties solicitors might incur by failing to advise clients on available insurance to protect their positions. The discussion also touched on the landmark TLT case, emphasising the substantial risks and repercussion.
SRA Rules and Guidance
The webinar detailed how the Solicitors Regulation Authority (SRA) integrates the IDD into its regulatory framework, including the Scope Rules and of Conduct of Business Rules. Despite the lack of enforcement seen to date, the importance of adhering to these regulations cannot be overstated, as it forms the foundation of solicitors’ compliance with the IDD.
It was felt by the panel that IDD non-compliance would be low-hanging fruit and a quick win for an incoming SRA chief.
Practical Considerations and Top Tips
Practical advice was a focal point of the presentation, with a segment dedicated to “If I were an IDO, I would make sure the following is in place…” This section provided actionable insights for Insurance Distribution Officers (IDOs) on ensuring compliance without alienating clients or colleagues. It stressed the significance of leveraging brokers to mitigate compliance and potential write-off nightmares, reiterating the indispensability of having an IDO who is well-versed in compliance measures.
A Proactive Approach to Compliance
The webinar “Scoping out the rules: insurance distribution dos and don’ts for Solicitors” offered a comprehensive overview of the IDD, blending regulatory analysis with practical advice. For solicitors navigating the complex landscape of insurance distribution, the key lies in a proactive approach to compliance, underscored by a thorough understanding of the IDD, robust internal policies, and effective client communication.
Solicitors are encouraged to leverage the insights from this webinar to ensure compliance with the IDD. As the legal profession continues to evolve, staying informed and adaptable will be paramount in meeting these regulatory challenges head-on.
For further advice about litigation insurance policies, John Pennie can be contacted at john.pennie@marsh.com
