A new EU directive adopted yesterday will make it easier for insurance intermediaries to do business in other member-states. The directive will enable intermediaries registered in their home member-state to sell insurance overseas, while guaranteeing high levels of EU-wide consumer protection.

Mr Paul Carty, chairman of the EU committee of the European Federation of Insurance Intermediaries (BIPAR), welcomed the directive as a "major step" in the strengthening of the single market.

"With their new European passport, intermediaries will breathe life into the dormant single insurance market and will make it work for the greater good of some 380 million consumers," said Mr Carty, who is also head of broker services at Irish brokers Coyle Hamilton.

Mr Carty said the directive would result in more Irish intermediaries doing business abroad, rather than large numbers of European players entering the market here. The directive must be transposed into national law within two years of its publication by the EU.

Member-states will have to apply certain standards of professional qualifications and ensure protection of customers through compulsory professional indemnity and financial capacity requirements.

All intermediaries will have to provide clients with specific information on their relationship with insurance companies and give them the main reasons underlying their advice. These requirements are already in place in Ireland under codes of conduct introduced by the Central Bank last year.

"The insurance mediation directive holds no fear for insurance brokers here. Frankly, it will bring European intermediaries up to the level of standards we have," Mr Carty said.

The directive will result in more cross-border selling. "Our brokers in Dundalk will be able to sell into Newry without having to worry about the Financial Services Authority," he said.