Which of the following best describes the function of the Insurance Distribution Directive?

The Insurance Distribution Directive (IDD) is primarily focused on establishing a regulatory framework for the distribution of insurance products. Its main objective is to enhance consumer protection and ensure that insurance products are marketed in a fair and transparent manner. The directive sets out requirements for the conduct of insurance distributors, including standards related to providing information, conducting business with integrity, and acting in the best interests of customers.

By defining clear standards for insurance distribution, the IDD aims to ensure that consumers receive adequate information about the products they are purchasing and that they are treated fairly throughout the process. This includes ensuring that distributors are competent and trained to provide the necessary advice and support to customers.

In contrast, the other choices focus on different areas that are not within the primary scope of the IDD. Data protection, claims management, and insurer solvency are governed by separate regulations and directives that deal specifically with those aspects of the insurance industry. Thus, the focus of the IDD distinctly aligns with establishing standards for the distribution of insurance products.