On February 6, the Electronic Commerce Committee (ECC) of the Canadian Council
of Insurance Regulators (CCIR) released an issues paper relating to the sale of
insurance products in the modern age of electronic commerce. The
paper summarizes the current uses of electronic media in marketing,
distributing and servicing insurance products and outlines issues
which may be of concern to regulators or may be inhibiting the use
and growth of various media, particularly because most current
insurance legislation was enacted many decades ago.
The paper is intended to stimulate debate about the issues noted in
the paper and launch a process of consultation on those issues, as
well as to educate and to build a common understanding of the topic
and issues for both regulators and stakeholders.
The ECC recognizes that social media have begun to play an
important role in consumer choices, although that is not a focus of
the paper (but stakeholders wishing to comment on social
media's role in insurance distribution are invited to do
According to the paper, four main activities are currently
undertaken on websites in connection with the distribution of
insurance: (i) information is provided to consumers; (ii) in some
cases quotes are offered; (iii) in some cases, the ability to
conclude insurance contracts online is offered; and (iv) insurance
representatives are made available behind-the-scenes to provide
advice to consumers. The paper also notes that Canada currently
does not have any regulatory or oversight framework specific to the
distribution of insurance products online.
Thus, the CCIR is particularly interested in obtaining feedback
regarding how to best achieve consumer protection goals in the
context of electronic commerce. Specifically, the CCIR seeks to
ensure that consumers:
have access to additional information/advice from a licensed
intermediary. Examples provided of ways to achieve this goal
include enabling consumers who visit a provider's website to
contact a licensed intermediary at any time and/or having the
insurance application reviewed to ensure that the product in
question suits the consumer's needs;
know they are dealing with a regulated entity. This could be
addressed by including certain information about the provider on
the provider's website;
have and understand the necessary information about the
products in question. The paper suggests that providers could draw
the consumer's attention to certain product information before
the purchase is completed;
have the opportunity to review the accuracy of the information
are aware of the terms and conditions of the products in
can rely on the transaction; and
enjoy security of their personal information.
The paper also considers the need to address electronic forms
and communications. The CCIR specifically questions whether current
legislation which requires that beneficiary designations be made
only in writing should be changed. According the CCIR, such
restrictions sometimes result in a consumer's estate being
designated as the beneficiary by default in cases where a
beneficiary is designated in an electronic application.
Comments on the paper are being accepted until April 27, 2012 and,
the CCIR notes, electronic submissions would be preferred.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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