What does IDD primarily relate to?

The correct answer focuses on the purpose and intent of the Insurance Distribution Directive (IDD). This directive was established primarily to enhance the protection of insurance customers across the European Union. It aims to improve transparency, ensure the suitability of products, and promote fair treatment of customers in the insurance market.

The IDD prioritizes customer needs and well-being by implementing regulations that require insurance distributors to provide clear information about insurance products, ensuring that clients are not misled and can make informed decisions. Thus, it places a strong emphasis on customer protection, aligning with broader regulatory goals of ensuring that clients receive appropriate services and products tailored to their individual requirements.

In contrast, while insurance pricing strategies, risk assessment procedures, and investment opportunities are important elements within the insurance industry, they do not directly correlate with the central aim of the IDD, which is fundamentally focused on safeguarding the interests of consumers. Therefore, the reason this choice is correct lies in its fundamental role in enhancing customer protection and ensuring ethical practices in the insurance distribution process.