Chapter 4 of the proposed new Policyholder Protection rules contains details regarding advertising standards.
Some of the more interesting ones, which relate to enquiries we often receive from readers, are included below.
Unwanted direct marketing
An insurer or any person acting on its behalf must afford a policyholder to whom it markets a policy through a mobile phone voice or text message the right to demand during or within a reasonable time after the message that the insurer or person acting on its behalf desist from initiating any such further messages or any other communication.
An insurer or any person acting on its behalf may not charge a policyholder a fee or allow a mobile phone service provider to charge a policyholder any fee for making such a demand.
Comparative marketing
Where a survey or other product or service comparison informs comparative advertisements, brochures or similar communications, the survey or other product or service comparison –
- must preferably be undertaken by an independent person or, if not undertaken by an independent person be so qualified in any advertisements, brochures or similar communications;
- must be conducted at regular intervals if relied on or referenced on an on-going basis;
- must ensure that policies, products or services being compared have the same or similar characteristics;
- must take account of comparable features across the policy, product or service offerings included in the sample to ensure that not only the price (e.g. the Rand value of premiums) is being compared, but also the benefits provided under the policies, products or services concerned;
- in particular, in the case of comparisons between policies, must ensure that price comparisons are based on policies with equivalent insured events, cover levels, exclusions, waiting periods, excesses and other key features to those of the insurer’s policies used in the comparison; and
- may not focus on the price of a policy or product to the exclusion of the suitability of the policies or products or their delivery on customer expectations.
The survey or other comparison source and date thereof must be referenced in advertisements, brochures or similar communications and the methodology applied must be easily accessible to the public in an easily understandable format.
Loyalty benefits or bonuses
Advertisements, brochures or similar communications that reference a loyalty benefit (including so-called cash- or premium-back bonuses) or no-claim bonus must not create the impression that the benefit is free and must adequately –
- indicate if the benefit is optional or not; and
- express the cost of the benefit including, where applicable, the average impact that the no-claim cash- or premium back bonus feature has on the premium, unless the impact is negligible.
If the cost of providing for the no-claim cash- or premium back bonus comprises less than 5% of the total premium payable under the policy, the impact is deemed to be negligible.
