Insurance brokers to operate under a basic consumer protection standard
Insurance brokers will be obliged to disclose in their offices and on their websites, to the fullest extent possible, information about their operations, and to provide financial consumers with a list of additional information about the terms and conditions of an insurance contract when concluding such contracts. These and other requirements are covered by the basic standard for the protection of the rights and interests of individuals and legal entities who receive financial services provided by members of self-regulatory organisations uniting insurance brokers. The document was elaborated by the Association of Professional Insurance Brokers and approved by the Bank of Russia.
The standard specifically sets the minimum required information to be provided to financial consumers. Insurance brokers will be obliged to make the following relevant information publicly available online or in their offices (if they do not have a website), or provide it to financial consumers upon their request in hardcopy: their full and abbreviated name, membership in a self-regulatory organisation (SRO), financial services provided, and the insurance companies on whose behalf an insurance broker operates. In addition, insurance brokers will be obliged to inform consumers about ways to protect their rights, and complaint handling and dispute resolution procedures.
Information posted on insurance brokers’ websites is subject to special requirements. Such information should be available in Russian 24/7 free of charge, it should not be encrypted or protected by other means which prevent consumers from reading it. Furthermore, such information should be updated no later than five business days after amendments are introduced.
The standard suggests that the legitimacy, reliability and completeness of reporting should be the underlying principles for the provision of information by insurance brokers for advertising purposes.
The standard also provides for the rules for interaction between insurance brokers and financial consumers related to the conclusion, amendment, termination and cancellation of insurance contracts. Specifically, an insurance broker is obliged to communicate with a financial consumer using the means of communication the financial consumer used when concluding (amending) the respective financial service contract.
In addition, the document establishes requirements for the application handling procedure. Thereby, an insurance broker should reply to a consumer's application within 30 calendar days.
It is of note that the standard regulates relations not only with individuals but also with small and medium-sized enterprises and other legal entities. Furthermore, the basic standard contains recommendations on insurance brokers’ interaction with individuals with disabilities.
The standard will be binding for all insurance brokers, irrespective of their membership in SROs no later than 180 days after it is published on the Bank of Russia website. During this period insurance brokers should adjust their operations to the basic standard.