Geshy Singh
The National Treasury has recently published proposed Policy Protection Rules (PRP) amendments under the Long and Short Term Insurances acts. This application is to ensure even greater client protection but, of course more compliance means higher insurance premiums.
Some of the main recommended changes and additional rules are as follows: The first is to ensure procedures in place for constant delivery of treating customers fairly (TFC). Also retail products must be designed to meet the needs of the consumer.
To illustrate the need for this Act; I have recently assisted a client with an old policy that she’s paying exorbitant fees for that really does not meet her needs. She attempted for many, many years to amend this and after taking over and a few painstaking months of going back and forth with the company, I managed to get them to agree to remove the superfluous benefits.
There is also a proposed rule to do away with ‘negative-option selection’, which is basically a condition that you may not be aware of.
The next rule is to ensure premiums are more fairly priced. Also regarding advertising, companies should not be misleading, and the message conveyed must be clear and easy to understand. Another recommended rule is that insurers must continually and regularly monitor a product to ensure it suits the client’s needs.
Also it is suggested that an even more proper and simpler complaints procedure be in place to make it easier for clients. It is also proposed that credit insurance must be in line with regulations made by the Minister of Trade and Industry.
To prevent insuring minors being insured with malicious intent, a new rule is proposed that they must have the signed and proven guardian’s consent.
A suggested new rule specifically under the Short-term Insurance Act is if your insurer terminates your policy, you must be covered after the cancellation of the policy and until the new one is in force.
While some complain it’s an over kill of rules, it certainly ensures that the consumer is more protected and fees and commissions earned by brokers are justified.
