New bill aims at reduction of the threshold for the exemption from the registration obligation as an ancillary insurance intermediary from 200 to 50 euros annual premium

A bill amending the law of 4 April 2014 on insurance, which essentially reiterates a bill tabled during the previous legislature back in 2022, has just been introduced in the Chamber of Representatives.

Ancillary insurance intermediaries offering an insurance product with an annual premium not exceeding 200 euros are currently exempt from the obligation to register with the FSMA, as well as from complying with the rules of conduct set out in the 2014 law on insurance. As evidenced in the Insurance Ombudsman's annual reports, however, a rising number of consumer complaints have been recorded year after year, relating in particular to ancillary mobile phone insurance (a 75 % rise being noted in 2023). Common issues reported include being pressured into taking out insurance or being made to sign a bank direct debit under an administrative pretext, only finding out later about the existence of the insurance. Such cross-selling practices are often carried out by salesmen in electronics with little background in insurance. Given the frequency of such irregularities, to better protect consumers more ancillary insurance intermediaries should be brought under the supervision of the FSMA. This bill aims to reduce the annual premium threshold for the exemption from the registration obligation from 200 to 50 euros.

In practical terms, the proposal amends Article 258, § 1, 1st par. of the law of 4 April 2014 on insurance, which exempts certain ancillary insurance intermediaries from the prior registration obligation in the FSMA’s Register of (ancillary) insurance intermediaries and compliance with the other rules of conduct set out in Part 6 of said law, relating to insurance intermediation and distribution. Specifically, the exemption applies to the cross-selling of insurance policies that are ancillary to the supply of a good or the provision of a service by a provider, and which cover the risk of breakdown, loss of or damage to the good supplied or the non-use of the service offered; or the risk of damage to or loss of baggage and other risks associated with a trip booked with that provider, when the amount of the premium, calculated on an annual pro rata basis, does not exceed 200 euros (excl. taxes) – or, in case of a service three months or less in duration, when the premium per person does not exceed 200 euros. This ceiling amount would now be significantly lowered, from 200 to 50 euros.

The law would enter into force on the 1st day of the 7th month following its official publication. Hence, it provides for a transition period allowing ancillary insurance intermediaries newly subject to the registration obligation ample time to complete the required formalities with the FSMA. The bill can be found at https://www.dekamer.be/kvvcr/showpage.cfm?section=/none&leftmenu=no&language=nl&cfm=/site/wwwcfm/flwb/flwbn.cfm?lang=N&legislat=56&dossierID=0215

Questions? Contact our Insurance expert Sandra Lodewijckx.