On 27 October 2020, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) published guidelines on the insurance product information document (IPID) which is required under the Insurance Distribution Directive. The guidelines contain the AFM’s most important findings and points for attention following an assessment of various IPIDs of household, liability and disability insurance products.
According to the AFM these guidelines are necessary because IPIDs, which should provide consumers with all relevant information about a non-life insurance product (what is covered by the insurance product, what is excluded, and what are the consumer’s obligations), often omit important information. As a result, consumers run the risk of not being well informed when making their decisions on the insurance product.
According to the AFM, the following does not always go well in IPIDs:
- very limited information is provided on exclusions;
- wrong use of lay-out options, such as the use of a single cross icon with multiple subjects/exclusions behind it, which results in an unbalanced image;
- important cover restrictions (such as maximum amounts, waiting times and deductibles) are often missing or are included under the wrong heading;
- important obligations are often missing, such as coordinating costs in advance; and
- termination/cancellation rights are sometimes not included.
The AFM does, however, indicate that their research has shown that consumers generally do receive good information about which risks are covered by the insurance product.