Netherlands financial authority issues guidance on embedded insurance

In November 2025, the Dutch Authority for Financial Markets (AFM) published the report "Putting customer interests first in embedded insurance", which recognises that the use of embedded insurance is increasing rapidly and explains the statutory obligations for providers and platforms involved in embedded insurance and offers practical recommendations.

The following highlights some elements from this Report.

Embedded insurance

Embedded insurance is when the sale of an insurance product is integrated into the purchasing process of a product or service. This could be the purchase of an insurance product when buying a bicycle or cancelation insurance when purchasing a concert ticket. In the Report, the AFM acknowledged that embedded insurance offers convenience, awareness and accessibility to insurances for customers and can lead to more suitable products and products conditions. According to the AFM, however, embedded insurance also carries risks, such as less well-considered choices, overinsurance or underinsurance.

Licence requirements

Platforms wishing to provide customers with embedded insurance can qualify as insurance intermediaries and can either operate under their own licence or, under certain conditions, choose to provide insurance-intermediary services without an AFM licence. In the Report, the AFM outlines the following licensing and exemption possibilities for each scenario:

• Under certain conditions, platforms can make use of the ancillary insurance intermediary exemption. If the platform only provides insurance-intermediary services for certain non-life insurance policies that complement a product or service, it may qualify as an exempted ancillary insurance intermediary. 
• Platforms can operate as a tied intermediary of the provider and use the provider's licence for the products in which they provide insurance intermediary services. In this case, the platform is not allowed to collect premiums and can, in principle, only provide insurance intermediary services for one provider per product.
• If the insurance product is offered as a group insurance policy in which the platform acts as the policyholder, a licence requirement may apply to the platform. This licensing obligation came into effect on 1 October 2025. There is no licence requirement if customers are automatically covered by the group insurance and have no option in this regard. A licensing requirement also does not apply if there is no remuneration for the policyholder.

Additionally, a platform may qualify as an unregulated lead generator (rather than a regulated insurance intermediary) if they share only basic customer contact details with providers (e.g. name, address, place of residence, telephone and email – this is commonly referred to as the "NAWTE-criterion").

Obligations and recommendations during customer journey

According to the AFM, in relation to the offering of embedded insurance products, the customer journey can be divided into four phases. The following is an outline of these phases along with statutory obligations and recommendations:

• Product development: providers must ensure that products are compatible with the needs, characteristics and objectives of the target market. This is a requirement under the product approval and review process-requirement (PARP) providers are subject to. Providers and platforms must ensure that they take customer interests into account in a balanced way during the development process when personalising products. Therefore, products should be personalised to promote customer interest. 
• Orientation: embedded insurance often gives customers limited time and options when considering whether to take out insurance. Therefore, the choice environment effectively guides customers and could impact their final decision. The guiding effect of the choice environment should be carefully considered and designed.
• Take-out: platforms and providers must ensure that the information they supply to customers is correct, clear and not misleading. Value for customers can be created by making clear how the insurance meets their needs and how it relates to traditional insurances that customers may already have. Relevant information on the insurance in the choice environment should be included so that it is easier for customers to determine the terms and conditions of the product, and customers should be informed on how the embedded insurance product compares with traditional insurance policies they may already have.
• Management: providers or platforms must ensure that they have an adequate complaints procedure and are affiliated with a dispute resolution body. Since embedded insurance typically create opportunities for cross-border services, there is a real possibility that the competent dispute resolution body is located in a different country than the customer. It must be clear to customers where to seek help in case of complaints. 

The Report can be found here.

If you have any questions on the obligations and recommendations outlined in the Report, contact your CMS client partner or the CMS experts who wrote this article.