According to the results of a study released yesterday by Option Consommateurs, selling insurance products online without the involvement of a professional poses too much risk to buyers. Except for some kinds of car insurance, the Quebec-based consumer protection association believes that online sales of general, life, and health insurance products should not be permitted unless an intermediary is involved.
The author of the study, Annik Bélanger-Krams, says there is a real risk to consumers who lack the sort of specialised knowledge that allows experts to understand the nuances and intricacies of insurance. Uninformed consumers could end up buying policies that they do not need, or which would be ill-suited or insufficient for their situation.
Protecting the public a priority
Option Consommateurs' position received strong support from the province's life insurance self-regulatory organization (SRO), the Chambre de la sécurité financière (CSF), for which "the findings of the study corroborate the concerns raised by the CSF and the Chambre de l’assurance de dommages (ChAD)".
According to the CSF, the study offers significant insights and must be taken into account so that public safety remains a priority, especially at a time when Quebec's Minister of Finance is preparing to conduct a review of all financial services legislation
"Insurance products are not general commodity products," emphasizes Marie Elaine Farley, president and CEO of the CSF. "As far as online insurance distribution is concerned, it is essential that consumers have access to advice from professionals who are trained and supervised by an independent body that oversees the education, ethics, and discipline of advisors who distribute financial products and services . "
Consumers should not find themselves without coverage
As for ChAD, which is the general insurance SRO in Quebec, its CEO Maya Raic says the Option Consommateurs study highlights the risks associated with the sale of insurance products over the Internet.
"We must ensure that consumers do not find themselves without coverage, underinsured, or with a product that is unnecessary or inappropriate," she said. "It is worth noting that three out of four consumers consider general insurance to be complex. At the moment, more than half them do not know all the exclusions and inclusions of their contract and do understand all the elements."
The study also considers the models currently in place in the UK and France and sheds a great deal of light on how to protect consumers in this kind of transaction. The association is suggesting a series of legislative changes and preventive measures to properly protect people who live in Quebec.
The study is available (in French only) on the Option Consommateurs web site.