Approval of the Royal Decree on training within the scope of insurance distribution

Latest additions to the Royal Decree on training in order to implement Directive (EU) 2016/97.

A few weeks ago, the Council of Ministers in Spain approved the Royal Decree 287/2021, of 20 April, on training and statistical-accounting reporting of insurance or reinsurance distributors, which would complement the Royal Decree 3/2020, on urgent action, in which it is included the new regulations on insurance distribution transposing Directive (EU) 2016/97 of the European Parliament and of the Council, of 20 January 2016, on insurance distribution, known as IDD.

In this regard, the Ministry of Economy understood to be of much greater benefit to elaborate a new Royal decree, instead of amending the Royal Decree of 2010, “due to the inclusion of the employees and responsible agents for the activity of an insurance distributor within the scope of the law, due to the large number of provisions that should be included or amended in the regulations and due to greater regulatory consistency.”

Examining the substance of the legislative text, the requirements of training for the employees of insurance distributors are reinforced. In particular, the latest legislative developments on training and competence should be noted:

1. 1. The nomenclature used up to now changes, from Group A, B and C to Level 1, 2 and 3.

Level 1

• • • • Responsible agents for the activity of an insurance or reinsurance distributor

• • • • Insurance and reinsurance brokers

• • • • Bancassurance operators

Level 2

• • • • Insurance agents

• • • • Employees of insurance and reinsurance undertakings

• • • • Insurance intermediaries

• • • • Bancassurance operators that provide advice about insurance or reinsurance products

• • • • External partners that provide advice about insurance products

Level 3

• • • • Includes the same profiles as in Levels 1 and 2, although they could only provide information.

1. 2. The change also affects to the hours and subjects of the training courses

2. 2. Training must be “permanent” (i.e., continuous): 

Accordingly, the annual compulsory continuous training shall be applicable from the year following that in which the distribution business starts.

	Royal Decree 287/2021
Level 1	25 class hours per year
Level 2	25 class hours per year
Level 3	15 class hours per year

The compulsory training may be taught by the insurance and reinsurance distributor, public or private universities, or by external training certifying persons or bodies, which should have class or distance assessment procedures certifying the successful use of the courses, and must comply with the requirements established on Section 2 of the Royal Decree.

Nontheless the need for this Royal Decree that accumulates significant delays, within the insurance industry the changes implemented by it have been widely criticised regarding Royal Decree 764/2010, effective up until now, because it is difficult to reconcile cutting in training hours and requiring more protection for the consumer.

In any event, and due to the lack of development in some areas as the contents of the access courses and accreditation mechanisms of training centres, the Directorate-General of Insurance is expected to issue a resolution on the next weeks to clarify these matters.

AUTHOR: José Temes Mosquera. Insurance Law Department / Departamento de Derecho del Seguro. jtm@belzuz.com