CONSUMER PROTECTION 

Insurance market conduct requirements seeks to ensure that customers are able to select the insurance product that best meets their needs . A prerequisite thereto is adequate timely and accurate provision of information by insurers and intermediaries. It should therefore include treating consumers fairly  and paying attention to their information needs and that will help to strengthen consumer confidence in the insurance market.

Sound market conduct needs to be based on a clear understanding by the insurer of the risks covered in the policy contracts and should be integrated into the overall risk management and governance structure of the insurer. For a large number of consumers, insurance products are difficult to understand and evaluate. Insurers and Intermediaries have a greater knowledge of insurance issues than the consumers and therefore arrangements should exist for potential policyholders to have access to information needs to make an informed decision before entering into a contract and should also be informed about their rights and obligations for the duration of the contract. Public disclosure of reliable and timely information facilitates the understanding by prospective and existing stakeholders of the financial position of insurers and the risks to which they are subject, regardless of whether they are publicly traded or not.  Consumer knowledge of the products sold in terms of investment increasingly for life products, commission rates and details level down the playing field.

The insurer should ensure it has adequate selection and management process for sales channels. Misselling has in some cases proved to be substantial where selling is not carried out by the insurer but by the intermediaries. As a result the obligations may fall on the insurer itself. Intermediaries should be licensed and registered and should have adequate general , commercial and professional knowledge and ability as well as having a good reputation in addition for intermediaries who handle client’s money should have safeguards in place to protect the funds. Intermediaries should also give information on their status, specifically whether they are independent or associated with particular insurance companies and whether they are authorized to conclude insurance contracts on behalf of an insurer or not.

A good claims resolution process is essential for the fair treatment of consumers . Through mediation- having parties to meet with trained mediators, binding arbitration often lawyers with specialized knowledge of insurance and contract law will ensure good management of client’s claims.

If consumers experience is that they will not be treated fairly by insurers, it will undermine their confidence in the system just as surely as insolvencies and other financial issues can affect the insurance company. Domestic opinion is impacted by the realties of the market place and in turn domestic views has the credibility influence on the views of foreign investors when the seriously investigate business conditions in a particular country.

                                                                                              Index       Previous    

Want to Check for the Premium Rating Guidelines?  Click here

                 Site Maintained by Pensions and Insurance Authority - PIA