Telephone and travel insurance will be better regulated to prevent the risk of fraud

Clean up the market and prevent the risk of scams. The Financial Sector Advisory Committee (CCSF) has adopted a number of new rules applying to affinity insurance contracts. This product is used in particular to cover the costs related to the repair or replacement of a smartphone, a tablet, a household appliance or even the cancellation of trips. The opinion of the CCSF was adopted unanimously by its members in order to “strengthen consumer protection”, said the body in a press release, this Tuesday, January 24. These new practices will come into effect no later than January 1, 2024.

Among the planned measures is firstly a section on the “collection of the consent of the insured”. Insurance contracts must be independent of the act of purchasing the good or service, so as not to mislead the customer. As the Insurance Ombudsman frequently points out, many customers are not even aware that they have taken out such coverage when they make their purchases. This is why the name of the insurer of the contract must also “appear clearly” on the contractual documents given to the insured.

The problem of vendor compensation

Once the purchase has been made, the insurer’s duty to advise will continue. Each year, he must send complete information to the individual with, among other things, the purpose of the insurance, the total amount of premiums for the coming year or a reminder of the conditions for termination.

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Telephone insurance: a new right is coming to protect you from scams

Advances that do not completely resolve market dysfunctions. One of the fundamental problems remains the mode of remuneration of the agents and employees selling this type of product. “Variable remuneration systems for sellers (…) must not distort information and advice on the insurance product sold as an accessory (…) This variable remuneration must not be paid before the sale that ‘it remunerates’, recalled the CCSF. In other words: the variable income earned by some sellers encourages them to be negligent, even outlaws. The CCSF thus plans to examine the question by the end of the year, after the publication of the work of the European Commission.

MEPs have already acted

To allow individuals to defend themselves against its traders who are not very attentive to their methods, the deputies had voted this summer a device to double the withdrawal period attached to affinity insurance. Since January 1, customers have one month – and no longer two weeks – to get rid of their contract free of charge from the date of signature.

The broker Indexia, very active in this market, for example, recently made people talk about it: it must be tried by the Paris Criminal Court for “misleading commercial practices” after overcharging for insurance for telephones and computers.

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