CCIR proposes travel insurance reforms

Canada’s insurance regulators have proposed several reforms for the travel health insurance market, including better training and information for sales forces and standardized definitions and terminology. In a recently-released position paper, the Canadian Council of Insurance Regulators said the travel insurance industry needs improvements to the application, screening and claims processes and simplified disclosure documents. It also said insurers should work to ensure adequate controls and oversight mechanisms are in place throughout the product life cycle. “We have heard the concerns of the public and insurance brokerage community and with this clear, nationally agreed way forward, we are reinforcing the pre-eminent goal of consumer confidence in their insurance protection when they travel,” said CCIR chair Patrick Déry, solvency superintendent at Quebec’s Autorité des marchés financiers. “It is our belief that these measures will go a long way towards meeting consumer expectations wherever Canadians live in the country.” The recommendations stem from consultations with stakeholders that followed the release of an issues paper in May, 2016. The CCIR said it expects insurers will begin to establish data collection methods to measure and evaluate the success of the initiatives undertaken to implement the reforms. Overall, it said, Canada has a strong and reliable travel insurance market. “However, from the comprehensive review that was undertaken to better understand the issues and concerns raised, it is the CCIR’s conclusion that there are opportunities for improvements to be made within the travel insurance marketplace, especially in the fair treatment of consumers.” The council’s first reform recommendation is for insurers to present product features more clearly. “To help reduce the perception of complexity and ensure the fair treatment of consumers, the industry should make travel health insurance products and related materials simpler and more targeted — preferably with a limited number of plans, regimes and options,” the CCIR said in the position paper. On the subject of terminology and definitions, the council has recommended that the industry produce a preliminary list, to be followed by a more complete list, of all relevant terms to be included in a standardization process. It wants insurers to establish general rules regarding the use of defined terms and expressions to avoid the use of synonyms and confusing terms and expressions, and a target deadline by which the industry can agree to use the standardized definitions for the relevant terms identified. “The industry should conduct consumer- focused testing to ensure that the definitions and terminology developed and used are clear and being interpreted and understood by consumers in the intended manner.” The CCIR also recommended that insurers take steps to improve their application and screening processes in order to properly identify applicants who would either benefit from a different travel health insurance product or undergo additional underwriting prior to making a purchase. “Steps should also be taken to better assist consumers’ understanding of their eligibility requirements and applicable exclusions at time of application. Insurers should also look at how to better assist consumers who may have questions or concerns during the application process, through enhanced educated staff at call centres and help lines, and better educated sales forces to allow consumers to have more confidence over their eligibility and coverage.” The CCIR also recommended that insurers prominently inform consumers before purchase that they will use the information from the application to assess eligibility for any claim made.


More coverage of the position paper is presented in Thompson’s June 5 weekly edition. Email or use the ‘subscribe’ tab for a copy or to subscribe.