Fair Treatment of Customers Amidst Covid-19: A call to insurers and intermediaries

By Chishiba Kabungo

The Pensions and Insurance Authority (PIA) welcomes the initiatives taken by insurers and intermediaries to support and assist consumers affected by COVID-19, including those who are particularly vulnerable. The Authority recognizes the unprecedented situation which has arisen as a result of the COVID-19 outbreak and is closely monitoring the situation as it continues to cause disruption to households and businesses across all spectrum of business and life as we know it.

Insurers, insurance brokers and ancillary insurance intermediaries (hereafter “intermediaries”) play an important role in enabling consumers to manage their risks by providing protection against uncertainties. Access to and continuity of insurance services should be considered essential in the context of the COVID-19 outbreak. One could argue that insurers and their intermediaries are better prepared to handle uncertainty or disruption to some extent. Uncertainty is at the core of insurance business.

Nevertheless, the scale and depth of the disruption caused by the COVID-19 is unprecedented and immeasurable. The outbreak has disrupted the insurance value chain and could undermine trust in the sector if the fair treatment of consumers does not remain at the heart of the sector’s responses. It is critical that insurers and intermediaries continue focusing on ensuring business continuity and the fair treatment of consumers.

In doing this, the Authority strongly encourages insurers and intermediaries to take into consideration various practical implications of the COVID-19 for the day-to-day activities of consumers, in particular, with regard to the social distancing measures announced by his Excellency, President Edgar Chagwa Lungu and the Ministry of Health.  In the current environment, consumers may not be able to fulfil contractual obligations. Examples of unfulfilled contractual obligations include (among others):

  • not being able to submit a claim within a prescribed timeframe;
  • not being able to submit regular premium installments;
  • not being able to renew a policy within the expected timeframe; and
  • using their usual residence as a workspace, which may be in breach of their household policy.

The Authority expects all market players to continue to act in the best interests of consumers, throughout the lifecycle of their relationship with the consumer. This is in line with the requirements on policyholder protection as set out in Insurance Act and other relevant legislation such as the Consumer Protection Act administered by the Competition and Consumer Protection Commission (CCPC). Insurance business is premised on the principle of Utmost good faith which must be exhibited by all parties to a contract.

In particular, the Authority asks the following of insurers and intermediaries:

  1. Provide clear and timely information to consumers on contractual rights. Inconsistent communication of exclusions can lead to consumer detriment and wider reputational damage for the insurance sector. It is crucial in these times of distress and pressure that consumers understand and are aware of the scope of their cover, the exemptions that apply and the impact of COVID-19 on their insurance policies.
  2. Consider the interests of consumers and exercise flexibility in how they are treated, where reasonable and practicable. In particular, the current situation may call for flexibility in terms of processes and timeframes to allow consumers to retain important coverage that would otherwise be lost.  
  3. Treat consumers fairly and be explicit in all communications. The Authority expects market players to treat consumers fairly and be explicit in their communication with consumers. They should avoid vague terms that could be misinterpreted or lead to confusion. All communications should be balanced and carefully calibrated.
  4. Inform consumers about contingency measures that insurers and intermediaries are taking. Consumers should also be informed about how these measures can impact their contractual relationship and services provided. Some examples of possible impacts, which should not be interpreted as exhaustive, include: 
    1. continuity of services (e.g. moving services to online channels);
    2. validity of insurance contracts (e.g. temporary automatic extension for the duration of the pandemic);
    3. changes to the claims management procedures; and
    4. additional organizational arrangements to deal with consumer inquiries during the COVID-19 period
  5. Continue applying product oversight and governance requirements. Product reviews should be aimed at assessing, where relevant for the product, the impact of the COVID-19 outbreak on the main features of existing products to assess whether they remain consistent with the needs, characteristics and objectives of the identified target market and if not take relevant measures. 

The Authority and other stakeholders are working collectively to ensure financial stability, market integrity and consumer protection are upheld during the COVID-19 pandemic. As the nature of the potential conduct and consumer protection risks might change, the Authority will continue to carry out enhanced market monitoring activities and, when necessary, issue further guidance to market participants.

For comments, questions or clarifications, send us an email at pia@ or follow us on our Facebook page, Pensions and Insurance Authority.

You can also call us on 211-251 401/5 or 0977-335809 or 0965-255136.

For Complaints, kindly use the following details:

Insurance-related complaints: 0950-136662, Email: insurance@

Pensions-related complaints: 0950-136663, Email: pensions@

The author is a Manager in the Insurance Market Conduct Unit at the Pensions and Insurance Authority.