Providing too much information, rather troubles consumers than helps them

Whilst clients will welcome more clearer and comprehensible insurance conditions and a transparent approach from insurers, too much and complex information may reduce the willingness and ability of the consumer to process it, Czech insurers warn.

The European Union has been adopting a growing number over the past few years legal acts that have a significant impact on the insurance sector. These are, for example, personal data protection rules (GDPR), rules on access to and pursuit of insurance and reinsurance activities (Solvency II), the Markets in Financial Instruments (MiFID II), the legislative framework for the distribution of insurance in the EU (IDD), the Regulation on the Communication of Key Information Regarding Structured Retail Investment products and insurance products with investment component (PRIIPs) etc. Most of the changes will be implemented into the Czech legislation by the middle of 2018 and will lead to a severalfold increase in the total amount of disclosures in insurance contracts.

The Czech Insurance Association draws attention to the increasing volume and complexity of information obligations can substantially reduce the willingness and ability of the consumer to process the information provided and carry out well-informed decisions.

Jan MATOUSEK, Executive Director of the Czech Insurance Association, explained that in the Czech insurers' view, the uncoordinated process of adopting European Union's legislation is leading to the situation where a number of obligations duplicates, which in combination with existing rules means that insurers overwhelm consumers. "They have to eg to provide 161 pre-contractual information before buying an investment insurance product from mediator. In addition, national legislation quite often require additional information, which may be up to 50 pages, to be provided to the customer in addition to the directives framework " says MATOUSEK. In the case of the life insurance products with an investment component, the amount of information will increase in 2018 sevenfold in comparison with 1990. "In the end, the regulatory avalanche is rather troubeling consumers because of the information overload," says Jan MATOUSEK.

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