Latvian central bank proposes making insurance agreements clearer

The storms and floods of July highlighted that insurance customers are often not fully informed about insurance services, which is why the Latvian Central bank is now proposing changes to the regulatory enactments so that policyholders can better understand the terms of the contracts and their suitability to their needs, the bank said September 9.

The Bank of Latvia informed the media that it has developed proposals for improving insurance services and presented them to the responsible ministries - the Ministry of Economics and the Ministry of Finance.

Currently, the state has laid down detailed requirements for the provision of insurance services and the conclusion of an insurance contract. Insurers are required to provide easily readable, understandable, and comparable insurance product information, including a standardized property insurance product information document. Customers, in turn, are obliged to consult this information in order to understand the terms of the contract.

In order to simplify and make the terms of the insurance contract clearer and easier to understand for customers, the Bank of Latvia proposes to require that the terms of the insurance contract be drafted in plain language based on the International Organisation for Standardisation (ISO) standard on the use of plain language.

The Bank of Latvia's proposal foresees also a requirement to include personalized information on the insured risks in the insurance policy, including their definitions and exclusions.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles

More

Most important