Insurance regulators have published a paper setting out their recommendations for the treatment of online commerce, and their view on the use of social media.
The Canadian Council of Insurance Regulators (CCIR) has published the recommendations of its Electronic Commerce Committee (ECC) on issues raised by doing business online.
The paper spells out what the committee has learned from consultations on these issues so far (it published an initial paper in January 2012); and sets out its recommendations to the CCIR, which aim to ensure that consumers receive adequate information and protection regardless of how insurance is sold.
The paper notes that while there is legislation governing electronic commerce in Canada, none of it applies specifically to financial products; and, insurance-specific legislation was developed long before electronic transactions were contemplated.
“Both of these circumstances have been cited by some industry participants as factors in inhibiting the growth of electronic commerce for insurance products,” it says.
Regulators therefore are looking at how to ensure consumer protection in the context of electronic commerce.
The paper deals with issues such as consumer access to information/advice; consumer understanding of product terms and conditions; the reliability of transactions; and, the security of personal information.
While the original paper did not specifically address social media, the committee sets out its view on this topic, too.
It says that the CCIR believes that the current legislative and regulatory framework should apply to social media communications. “Rules pertaining to, in particular, ethics, advertising, suitability and file record-keeping, are to be followed when insurers and representatives use social media,” it says.
The committee requests comment on its recommendations by July 26. After that, it will finalize its recommendations, and present them to the CCIR.