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Insurance distribution: The regulatory net tightens further around the status of regulated intermediaries
The “group policy” is a technique commonly used in affinity insurance, Insurtechs, or traditional brokers. Either the intermediary itself or an association, a company, or a professional federation subscribes to a “group” insurance policy with an insurer and markets it or distributes it to third parties, often members of the association or clients of the intermediary.
The policy between the member and the insurer, through the group policy, is then qualified as an insurance policy. Similarly, the subscriber of the group policy, if remunerated, is then qualified as an insurance intermediary and must therefore meet the mandatory legal conditions of said status.
But it goes even further since the judgment of the Court of Luxembourg of September 29, 2022, and the ongoing expansion of the regulation of insurance intermediaries by European Union law. Thus, a company markets to third parties, not insurance policies through a group policy, but membership in an insurance policy of which it is the sole policyholder. It is through assignments of claims that, on the day of any claim (illness, accident, etc.), the company’s clients become beneficiaries of said insurance policy.
Responding to a preliminary question from the Federal Court of Germany, the CJEU considers that: “falls within the notion of ‘insurance intermediary’ and therefore that of ‘distributor of insurance products’, within the meaning of those provisions, a legal person whose activity consists in offering its clients to voluntarily join, in return for remuneration received from them, a group insurance that it has previously taken out with an insurance company, this membership
giving these clients the right to insurance benefits in case
, notably, of illness or accident abroad.”
It is therefore a kind of distribution of a future, and not certain, right to insurance, on the day of any claim.
One is not surprised by this decision when one knows the meaning of European regulation: to include the greatest possible number of cases in the regulated status, in the name of the sacrosanct “consumer protection“.
The net thus sees its meshes tighten more and more each day, and no insurance distributor fish is supposed to slip through them. It will not be said that the small fry escapes the control of Brussels !