Radio show notes (NBFIRA Policyholder Protection Rules) - 23rd July 2019

Source: Wikipedia

I was on DumaFM today with friends from NBFIRA talking about the new Policyholder Protection Rules relating to insurance products.

So what do these Policy Protection Rules say?

No background, no history, no lengthy (and boring) explanations of laws, regulations and small print, what actually matters to you and me?

Cooling-off period

A customer can now cancel an insurance policy within 30 days of receiving the policy. Not 30 days from agreeing to the deal but from when the policy actually arrives and they’ve had a chance to read and digest it. If they choose to cancel, they’re entitled to a refund of any premiums paid, minus any admin expenses the company has incurred.

However, this obviously doesn’t apply if the customer has made a claim in that period.

Penalties for termination, cancellation or withdrawal

If there are any penalties for cancelling or termination a policy, the company must disclose these when the policy is being sold. Not some time later when the consumer asks to cancel.

Importantly, this covers those policies that have an investment component and where the commissions and charges are “front-loaded”, being deducted in the early stages of the policy rather than throughout it. The people selling these products MUST explain that if the policy is terminated early then the customer might get little or nothing back in the early years.

Claims procedures

Companies must explain the claims procedures and how long they will take.

Complaints procedures

Companies must explain their complaints procedures, and also that NBFIRA can assist customers with problems.

Oral agreements

Anything said to a customer when the policy is being sold must then be put in writing within 30 days of the discussion.

Blank or incomplete forms

Policy holders must not be asked to sign blank or incomplete application forms.

Choice of insurance

(I like this one a lot.)

Anyone entering into a loan, credit or lease agreement that requires insurance MUST be allowed to use an existing insurance policy that they already have, if it’s suitable. So someone who already has a household insurance policy can use that to cover something they buy on credit or hire purchase. This is good because thee insurance policies most stores offer are incredibly expensive.