Insurance Product Information Document Guidelines, Template, FCA, and Aviva
Insurance Product Information Document Guidelines
Definitions:
For the purpose of this Implementation Guide the following definitions apply:
a) ABI means the Association of British Insurers;
b) EC means the European Commission;
c) EIOPA means the European Insurance and Occupational Pensions Authority;
d) FCA means the Financial Conduct Authority;
e) GIC means the ABI General Insurance Council Management Committee;
f) IDD means the Insurance Distribution Directive;
g) IPID means the Insurance Product Information Document;
h) ITS means Implementing Technical Standards for the IPID.
Introduction:
1. This Guide is intended to support ABI member insurers develop their approach to creating the IPID for different non-life products, in particular the sections of the document entitled ‘What is insured’, ‘What is not insured’ and ‘Are there any restrictions on cover’. It is a voluntary Guide and is not a statement of industry best practice. The Guide will be withdrawn 12 months after its publication date.
2. The requirements arising from the IDD are due to come into force on 23 February 2018. This includes the provision of an IPID for non-life insurance contracts. The IPID is intended to be a short, pre-contractual non-personalised summary document which includes the content determined by Article 20(8) of the IDD text.
3. Draft ITS for the IPID were published by EIOPA on 7 February 2017. The draft ITS are subject to a 3-4 month scrutiny period by the EC. This Guide has been developed on the basis of the draft requirements in order to allow firms to incorporate the principles through the early stages of their development work. We will consider whether further updates are required in response to EU and UK regulatory developments.
4. The FCA’s Smarter Consumer Communications Feedback Statement (FS16/10) challenged general insurers to simplify and demystify consumer communications to help drive a greater understanding of the key product benefits and limitations, enabling consumers to make informed decisions based on a broader range of considerations than price alone . GIC agreed that the ABI’s IDD working group would be best placed to consider how to take this forward in conjunction with the implementation of the IPID.
5. Article 6 of the draft ITS also specifies that the IPID shall be drafted in plain language , facilitating the customer’s understanding of the content of that document and avoiding jargon. This Guide is intended to support ABI members to use plain language and apply a coherent document structure to the IPID, for the benefit of their consumers.
6. The examples given within this Guide are illustrative, and should not be considered as prescribed wording for firms to use. The guide is intended to assist firms as they make their own judgements in developing IPIDs suitable for their target market and product range.
Principle 1: The IPID should complement other product documentation and information presented through the sales journey.
1.1 Article 3 of the draft ITS states that the IPID shall include a prominent statement immediately below the company name that complete pre-contractual and contractual information about the non-life insurance product is provided in other relevant documents .
1.2 Cross references to the policy document should be limited in order to be effective. Firms should consider which additional information would be most important to the consumer and highlight this within the IPID.
1.3 Section sub-headings may be used consistently within the IPID and other policy documents, in order to enable consumers to cross-reference information readily. This approach is likely to be more appropriate for single-risk products where fewer sub-headings are used. Information about multi-risk products may need to be aggregated in order to fit within the IPID document size limit.
1.4 Within the IPID, information should be presented in a consistent manner across the ‘What is insured?’, ‘What is not insured?’ and ‘Are there any restrictions on cover?’ sections .
Example A: Consistent information
‘What is insured’ Personal items away from your home…
‘What is not insured’ Laptop computers…
‘Are there any restrictions on cover’
Away from home cover limit £1500
Away from home excess £150
Principle 2: Technical terms should be avoided or explained in plain English.
2.1 Technical insurance terms should not be included within the IPID as far as possible . Where necessary, and where space permits, it may be beneficial to provide a simple description of the term before it is presented so that consumers are engaged.
2.2 Ambiguous and unclear words or phrases should be avoided or explained.
Example B: Technical terms (illustrative purposes only)
If you are involved in an accident which causes damage to another person or vehicle, we will pay the cost of any damage you are legally responsible for (known
as Third Party Liability).
Auto renewal – Your policy cover will be renewed and payment taken unless you contact us to stop it before the renewal date.
Courtesy Car – You will receive a courtesy car while your car is being repaired following an accident. It is not provided if your vehicle is stolen or written off. It is
not guaranteed to be a vehicle of similar size or specification.
Legal Expenses/Uninsured Loss Recovery – Access to legal advice and to cover the legal costs of claiming compensation following an accident that was not your fault.
Principle 3: Information included within the IPID should be determined based on both product performance data and consumer understanding.
3.1 The maximum page limit and minimum font size applied by the ITS necessitate that firms exclude certain information they currently include within policy documents and, where applicable, policy summaries. Firms will therefore need to determine which information is prioritised within the IPID based on a range of factors.
3.2 Priority for inclusion within the IPID should be given to the core product components , which may be determined based on the compulsory requirements of the product (for example, the minimum liability cover required for motor insurance policies), by high claims volumes and values, or costs which customers may struggle to fund in the absence of cover.
Example C: High Value Medical Claims in Travel Insurance
ABI statistics show that in 2015, travel insurers paid out £365 million, equating to £1 million a day, to 494,000 individuals and families who needed help when they were abroad.
The main cost of claims was for emergency medical treatment, with insurers paying out over £196 million to cover travellers’ medical expenses and repatriation. More than 166,000 travellers claimed for medical treatment.
An annual travel insurance policy costs an average of just £33, while the average medical expenses claim was more than £1,200, and average cancellation claim £800. In total, insurers also paid out £128 million to 160,000 individuals and families to cover the cost of cancelling their holiday.
The above statistics indicate that cover for medical treatment is a core product component that should feature clearly and prominently in the IPID.
3.3 Insurers should also consider which product features may be likely to be of particular interest to consumers within their intended target market.
Example D: Baggage cover in Travel Insurance
Insurers paid £16 million to 87,000 people to cover the cost of lost baggage and money whilst travelling. As highlighted in example C, travel insurers’ pay out significantly more for emergency medical treatment than lost baggage, however baggage cover may nonetheless be a product feature important to customers.
Therefore a travel insurance product that includes baggage cover should highlight this on the IPID, and one that doesn’t should highlight the exclusion.
3.4 The IPID also provides an opportunity to tackle common misconceptions consumers may have of the product. These may be identified with reference to complaints volumes, declined claims and consumer enquiries.
Example E: Wear and Tear Cover in Home Insurance
Will insurance cover damage that is caused when things wear out?
Home insurance policies will not cover wear and tear. They are meant to cover damage caused by sudden and unexpected events, not things wearing out, breaking down or failing because they have not been maintained properly. It is important that you look after your home and possessions and maintain the property well as home insurance is not a substitute for proper maintenance.
3.5 Other product features with low claims volumes and severity may be excluded from the IPID entirely, unless they are considered to act as a key product differentiators in line with Principle 4 (below).
Example F: Freezer cover
Most standard home insurance policies include freezer contents cover if the freezer breaks down or the power is disconnected accidentally. However, claim volumes are typically low, so firms may determine that this does not require inclusion.
Principle 4: The IPID should allow consumers to compare products by prominently highlighting key differentiators.
4.1 Core product information that is either mandatory, or varies very little by provider (e.g. motor fire and theft cover), should be presented concisely, in order to allow space to describe features or exclusions which may differentiate the product from others available on the market. Consistent features and exclusions may be identified by benchmarking, use of existing market intelligence reports, or other external sources.
4.2 Differentiators may include, but are not limited to:
a. Benefits, product features and/or exclusions which are not generally included within other comparable policies;
b. Benefits and/or exclusions with cover limits which may be higher or lower than other policies;
c. The level of excess applied to individual risks, where there is no standard excess for all aspects of cover offered by the product;
d. Product features which are optional, but which may be offered as standard by other providers.
Example G: Accidental Damage in Household Insurance
Many policies provide limited accidental damage as standard (e.g. accidental breakage of fixed glass in buildings or furniture, accidental damage to toilets, cisterns and other fittings, and accidental damage to underground pipes and
cables).
Home insurance policies can include limited accidental damage as standard, with the option to purchase extra accidental damage cover. However there are also products that exclude all accidental damage cover, which has to be purchased as an optional extra and others which include full accidental damage as standard. As such,
the variation of how this cover is offered in the market would support that Accidental Damage should be explained in the IPID.
Example H: Windscreen Cover in Motor Insurance
Some providers will offer specific windscreen cover as standard, others may present
it as an optional extra for which you’ll have to pay an additional fee, and some policies may offer no windscreen insurance at all.
Principle 5: Explanations of risks and exclusions may be best presented using broad sub-headings and scenario based descriptions.
5.1 Consumers may also benefit from broad sub-headings being used within key sections of the IPID. Article 7 of the draft ITS provides that the use of sub-headings
5.2 For some products, consumers may find it easier to understand what is insured by the policy if the benefits and exclusions are grouped by insurable event within the IPID. Describing the circumstances which may result in a claim, before describing the possible outcome, may lead to higher levels of engagement.
Example J: Scenario descriptors
If you are in an accident that was your fault, we will:
If you become ill on holiday and need emergency medical treatment, we will:
14 Draft ITS for the IPID, Article 7, page 13
Principle 6: Optional aspects of cover may be presented within the IPID under certain circumstances.
Insurance Product Information Document FCA
6.1 It is assumed that add-ons which meet the FCA Sourcebook definition of a ‘Policy’ will be presented within a separate IPID from the primary product.
6.2 Optional covers may be included within the IPID, if clearly flagged as such, but are not necessarily required to be. Firms may consider the following when determining whether to include cover options:
a. High sales volumes;
b. Whether other providers typically include the cover as standard;
c. A consumer expectation that the cover would be included, even where it is commonly an option or exclusion;
d. Uncommon options which may prompt consumers to select that product.
6.3 Article 5 of the draft ITS establishes that information provided about add-ons and optional covers, if any, shall not be preceded by ticks, crosses or exclamation marks. The IPID is not intended to be personalised for individual consumers .
6.4 It is likely that variable cover limits would be best presented elsewhere in the customer journey in order to be shown in a clear manner. Information about variable limits may be included within the IPID where this would assists the consumer’s understanding of the product , or where they may act as a significant differentiator.
6.5 Products which have overlapping cover but differ significantly are likely to be considered as separate products and warrant individual IPIDs. This would apply to the following:
a. Third party only; third party fire and theft; and comprehensive motor policies;
b. Buildings only; contents only; and combined household policies;
c. Single trip; and annual travel policies;
d. Pet accident only; maximum benefit; lifetime and time-limited policies.
Insurance Product Information Document Aviva
Private Medical Insurance
Insurance Product Information Document
Company: Aviva Insurance Limited Product: Healthier Solutions
Registered in Scotland, No. 2116. Registered Office: Pitheavlis, Perth, PH2 0NH. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm reference number 202153.
This document provides a summary of the key information relating to a private medical insurance policy. The full terms and conditions of the cover and other important information are included in the policy documentation. What is this type of insurance?
This insurance is designed to provide cover for members who permanently live in the United Kingdom, for treatment of an acute condition such as a disease, illness or injury that is likely to respond quickly to treatment.
What is insured? What is insured? Continued…
In-patient and day-patient treatment
- Hospital charges
- Specialists fees
- Diagnostic tests such as blood tests, X-rays and scans
- NHS cash benefit – cash payment of £100 each night up to a maximum of 30 nights Out-patient treatment
- Consultations and treatment with a specialist
- Diagnostic tests such as blood tests, X-rays and scans
- Physiotherapy, osteopathy and chiropractic treatment on referral by a specialist
- Mental health treatment as an out-patient up to £2,000
Additional benefits
- Home nursing
- Private ambulance
- Parent accommodation
- Hospice donation of £70 each day up to 10 days
- GP referred speech therapy for children
- Baby bonus – £100 for each baby born or adopted within a year of birth
- Treatment for complications of pregnancy and childbirth as specified in the terms and conditions
- Surgical procedures on the teeth performed in a hospital
- Limited emergency overseas cover as an in-patient or day-patient during trips of up to 90 days
- Mental health treatment as an out-patient up to £2,000
- 24 hour GP and stress counselling helplines
Extensive benefits for cancer treatment We’ll cover the cancer treatment and palliative care required, as recommended by a specialist, if you make a cancer claim. We’ll also provide extensive cover for aftercare, including consultations with a dietician, as well as money towards prostheses and wigs.
Please refer to the terms and conditions for full details.
Options to increase your cover ( which will increase your premiums ) n Other treatments and therapies – such as GP referred
physiotherapy, osteopathy, chiropractics and acupuncture
n Dental and optical benefits n Mental health treatment as an in-patient or day-patient
n Extended hospital list – covers additional London hospitals
n Protected no claim discount – you may opt to protect your NCD so that if you need to make a claim you'll retain your discount
Options to decrease your cover ( which will reduce your premiums ) n Reduced out-patient cover options are available n Excess options are available which apply to each member every policy n Six week option – eligible in-patient or day-patient treatment will only be covered if this is not available on the NHS within 6 weeks n Trust or Signature hospital list – reduces the number of
hospitals that are available to use
7 What is not insured?
These are some of the core exclusions which may change if you select options to increase or decrease your cover. Please refer to the terms and conditions for full details.
- Pre-existing conditions - subject to underwriting type
- Long-term or chronic conditions – such as a condition that continues indefinitely, requires ongoing monitoring or has no known cure
- HIV/AIDS and related conditions
- Treatment for pregnancy and childbirth
- Diagnostic tests and treatment for infertility
- Surgical or medical appliances such as hearing aids or crutches
- Alcoholism, alcohol abuse, drug abuse, solvent abuse and other addictive conditions
- Treatment undertaken by a specialist without a GP referral
- Psycho-geriatric conditions such as Dementia
Are there any restrictions on cover?
7 What is not insured? Continued…
- Diagnostic tests requested by a GP
- Kidney dialysis
- Cosmetic treatment
- Take home drugs and dressings
- Professional sports injuries
- Experimental treatment
- Treatment required as a result of war, terrorism, contamination by radioactivity, biological or chemical agents
- Self inflicted injury
- Sleep disorders and sleep problems
- Treatment for warts, verrucas or skin tags
- Weight loss surgery
- Treatment directly or indirectly related to birth control
- GP charges and treatment
- Sexual dysfunction
- Varicose veins
- Co ver for pre-existing conditions under this product is dependent on the underwriting type that applies to each member.
- S pecialists’ fees will only be covered up to the limits in Aviva’s fee schedules.
- H ospital fees are only covered in full when using a facility agreed by us, which may not be at a hospital on the chosen list.
- C T/MRI/PET scans are only covered when using a facility agreed by us.
- S ome benefits have specific limits. Please refer to your terms and conditions for full details.
- If you select an excess, eligible benefits will only be paid once the excess amount has been deducted.
- If y ou choose a reduced out-patient limit, the following benefits will be removed: surgical procedures on the teeth, complications of pregnancy and childbirth, and limited emergency overseas cover.
Where am I covered?
- The United Kingdom - for the purposes of this product: Great Britain, Northern Ireland, the Channel Islands and the Isle of Man.
- Outside of the United Kingdom, any benefit is restricted to what is included in the limited emergency overseas cover.
What are my obligations?
• You must take reasonable care to provide complete and accurate answers to the questions we ask when you take out, make changes to, and renew your policy. All members must also take reasonable care to provide complete and accurate answers to the questions we ask when making a claim.
• You must also tell us about changes to your circumstances, for example, a change of name, address, if any member works for the diplomatic service or foreign embassy. You must tell us as soon as possible if any member no longer permanently lives in the UK.
• The provision of insurance under this policy is conditional on you observing and fulfilling the terms, provisions, conditions and clauses of this policy.
• In the event of a claim, we strongly recommend that you call us before any planned consultations, treatment or diagnostic tests take place so that we can advise you on what will and will not be covered.
How do I cancel the contract?
• You can cancel your policy at any time. If you cancel within 14 days of purchase or renewal (or, if later, from the day you receive your policy or renewal documentation), provided no claims have been made, you will receive a full refund of the premium. If you cancel after the 14 days, you will be entitled to a refund of premium less a proportionate deduction for the time we have provided cover.
If you wish to cancel your policy, you will need to notify Aviva in writing at: Aviva Health UK Limited, Chilworth House, Hampshire Corporate Park, Templar’s Way, Eastleigh, Hampshire, SO53 3RY, or by calling Aviva on 0800 092 4590. Calls to and from Aviva may be monitored and/or recorded.
GEN6153 10/2017
Insurance Product Information Document Template
Download Document Template > https://eiopa.europa.eu/Publications/Technical%20Standards/Insurance%20Product%20Information%20Document.pdf