In order to limit abuse, the legislator has imposed a number of obligations on insurers, including that of informing the client. Insurers are therefore required to provide their clients with the key investor information document. It is a document of 2 or 3 pages in which insurance indicators must appear. Banks that provide mortgages are, for example, required to indicate to the lender two insurances apart from those that they offer themselves.
This text from the European Commission insists on the obligation of information of the insurers towards the policyholders.
One of the major innovations that emerges from the text of the IDD is that concerning the establishment of new pre-contractual information obligations. In this context, the IDD indicates the possibility for the insurance broker, before the conclusion of the contract, to provide the potential client with clear and precise information on his subjective status and on the type of remuneration he will receive.
Subsequent provisions of the IDD introduce a series of additional and specific remuneration transparency requirements. In this sense, article 19 of the DDA provides that the broker must provide the client with a series of information regarding the existence or not of potential conflicts of interest. But above all, he must give precise indications on the nature of his remuneration in relation to the insurance contract.
In compliance with the aforementioned obligations, the intermediary must therefore indicate to the client whether it operates on the basis of:
Since personal loans are part of consumer credit products, the related policies are subject to the rules set out in the liberalization decree. Thus, as happens in the case of mortgage loan insurance, banks must now submit to the customer at least two quotes from different insurance companies.
These proposals should not be attributable to the bank or to a financial intermediary working for the lending bank. This obligation should allow the consumer to compare several solutions. Obviously, it will have to be insurance companies that provide guarantees compatible with the needs of the bank.
Insurance companies are required to provide customers with a number of indicators, but customers must also take the trouble to read the documents provided to them.
Before subscribing to insurance for a home loan, it is essential to always carefully read all the clauses and pre-conceptual information to avoid unpleasant surprises and pay unforeseen sums.
It is also necessary to request information on the conditions for early repayment of the loan, checking whether it is possible to be reimbursed and, if necessary, whether or not penalties are foreseen. Avoid policies with a recourse clause. This type of insurance provides for the payment of the monthly installments of the loan in unfavorable cases.