The Massachusetts Division of Insurance issued a bulletin spelling out new disclosure requirements for insurance premium quotes for private passenger motor vehicle and personal property insurance.
The Bulletin 2014-08, published on Oct. 20, addresses disclosure issues for coverage and premium information for periods that are different from one-year policy periods. The Division of Insurance said it expects to see these disclosure requirements implemented in all sales information customized and provided to consumers throughout the private passenger auto and personal property insurance markets by no later than March 15, 2015.
The Division said it expects that “all insurance companies and insurance producers selling products in these markets shall prominently display the policy term associated with any premium quote produced for an applicant’s consideration prior to the applicant’s decision to purchase a new policy.”
The new requirements would apply to “any coverage information or policy premium quote for a policy period that is different from a one year period that an applicant may view electronically via website or e-mail, as well as any copy of a premium quote for a policy that is different from a one year period that an applicant may print or electronically store from a website or e-mail or that is printed for the applicant by an insurance producer.”
- Under the new disclosure requirements, if a monthly premium is quoted, the policy premium for the total policy term associated with that quote, and the total duration of the policy term, shall also be prominently displayed next to – meaning just below, above, to the right, or to the left of – the monthly premium.
- Also, the full policy premium quote for the entire policy term, and the total duration of the policy term, shall be prominently displayed on any coverage documents associated with the quote in the top half of the page as viewed or printed, according to the bulletin.
“Massachusetts’ evolution to managed competition in auto insurance has generated widespread innovation and saved millions of dollars for the state’s drivers,” the Division said in a statement provided to Insurance Journal.
“Many insurers, especially those newly drawn to the Massachusetts market, rely heavily or even exclusively on web-based marketing and sales, allowing drivers the opportunity to comparison shop for insurance coverage from anywhere at any time,” the Division said.
“Bulletin 2014-08 reminds the industry that while carriers are free to offer policy quotes for terms of less than one year, they must clearly identify to consumers the actual term of the policy associated with a monthly policy quote to allow for full and fair comparisons between carriers,” the Division said.
Daniel J. Foley, vice president of government affairs at Massachusetts Association of Insurance Agents (MAIA), said his association had previously sent a letter to the Division regarding premium quote information requirements and that this was one of the issues that were raised.
What precipitated all this was some of the quotes that were received from direct writers, said Foley. What was happening was that sometimes people would go online and shop around looking for quotes, primarily for auto insurance, and some quotes the consumers received didn’t indicate whether they were for a full-year or a six-month policy, he said.
Topics Massachusetts
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