The Canadian Council of Insurance Regulators, citing public concerns over the travel insurance market, has announced the beginning of a public consultation on travel insurance.
The CCIR has also published a paper reviewing product design and market conduct practices in the travel insurance industry,
Insurance Journal reported. The organization believes “there is a potential for misalignment between consumer expectations and industry practices for travel insurance.” The paper is intended to help determine strategies for improving customer protection and confidence.
One of the CCIR’s main concerns is the apparent lack of standard travel and health insurance (THI) products; that lack of standardization can lead to confusion for the consumer, the organization reported.
“The Working Group believes that the complexity of the design of some THI products can be an obstacle to the consumer’s ability to fully understand all available options and relevant limitations,” the CCIR’s paper stated.
The paper also noted that a lack of consistent terminology made it more difficult for consumers to understand travel insurance products.
“The Working Group noticed that key terms and conditions used in these products lack standardized definitions and terminology,” the paper stated. “The vocabulary and definitions seem to vary not only from one insurer to another but also from one product to another offered by the same insurer.”
The CCIR also found underwriting in the space to be a concern - a survey of travel insurers found that 95% of the travel insurance products sold in 2014 were accepted automatically.
“The Working Group considers this to be an exceedingly high automatic acceptance rate and is surprised that so few applicants have to undergo medical examinations during the underwriting process,” the CCIR stated.
The CCIR’s complete paper is available
here.
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