Insurance customers in Europe might be overloaded with information that will not in any way help them make a decision to choose a product. This is because of new regulations of the European Union, according to Insurance Europe, the European insurance and reinsurance federation.
The amount of information disclosed to the customer will double if the proposal is accepted in the United Kingdom. Currently, a consumer purchasing an insurance-based investment product online from a broker must be provided with 75 different pieces of pre-contractual information under existing EU legislation. The new regulation Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, the Solvency II Directive and the European Commission’s (EC) proposal for the Insurance Mediation Directive (IMD 2), the consumers will end up being provided with 147 different pieces of pre-contractual information. There are a number of numerous examples of duplicative requirements can also be found in these new rules.
“The focus of regulation should be on providing a high quality of relevant information to consumers, rather than just a high quantity. Regrettably, this is not the path that the EU is on today. The latest legislative developments at EU level will dramatically increase the amount of information that insurers will be required to provide to consumers. As things stand, the number of information disclosure requirements is set to double,” said Michaela Koller, director general of Insurance Europe.
The federation feels that ensuring transparency that effectively helps consumers compare products and make informed decisions is crucial in ensuring better consumer protection. The disclosure of too much information is counterproductive, and risks distracting and confusing consumers and, eventually, moving them away from informed decisions.