Second layer of affinity insurance. The Financial Sector Consultative Committee (CCSF), a consultative body that proposes measures to improve the relationship between financial institutions and their customers, unanimously adopted an opinion to “better inform and better protect” customers. Distributors of affinity insurance, insurance contracts taken out as a supplement to the purchase of a good or service or as an extension of guarantees, are under fire from the regulator (ACPR) and consumer associations for the lack of clarity about the terms of contracts and their aggressive business practices.
Already in the autumn of 2022, CCSF had initiated the work of informing policyholders after noting that “some of these contracts were entered into without the policyholder being sufficiently informed”. After three meetings, the members of the CCSF adopted several measures that sellers of affinity insurance must take by January 1, 2024 regarding the collection of consent, annual disclosures, extension of contractual guarantees in duration and distribution.
In addition to the reminder of good practice required by law, the CCSF explains that “the name of the contract’s insurer must appear clearly in the contractual documents provided to the insured”. Indeed, there may be a vagueness during the purchase of a good or service between the contract attached to that purchase and the contract attached to an insurance product provided by an insurance company. A welcome letter specifying in particular the customer’s commitment, the date of the contract and guarantees or even the coordination of the claims department must be given to the insured after signing the contract, including for subscriptions via the Internet. More generally, complete information to the insured must be sent each year.
With regard to the extension of contractual warranties, the seller distributing the insurance contract with this extension must “indicate to the consumer that it is in fact an insurance contract and not a legal or commercial warranty”, and the insurer must remind per mail or e-mail “two months before the effect of the guarantee, about the existence of the insurance contract signed by the consumer” and the conditions of termination.
Waiver period
CCSF also addressed the method of remunerating salespeople. After “noting that certain types of financial incentives provided to employees of insurance intermediaries on an ancillary basis may be a source of aggressive commercial practices,” the opinion explains that “the systems of variable remuneration of sellers of products and services in the main case title must not distort the information and advice about the product sold as an accessory”.
This statement comes a few months after a first decision on the subject of affinity insurance in April. In particular, CCSF has extended from January 2023 the exemption period provided for in the Hamon Law from 14 days to 30 days in connection with the subscription of affinity contracts. The body also intends to continue its work on supplier compensation systems. “The committee will resume its work on the method of remuneration and training of these sellers, at the end of 2023, after the work of the European Commission has been completed”, he explains in a press release.
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