Information disclosure: Compliance and enforcement
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| Q.2 Is it reasonable to require insurance disclosure in accordance with sections 32, 33 and 35 of the CCCFA? |
Many consumer representatives expressed support for this proposal. They believed it would help borrowers realise the contract was subject to insurance and for them to question whether they really needed it. It was suggested that any relationship between a lender and an insurer should be disclosed. Another suggestion was that a compulsory verbal walk though of the insurance be made if it was part of the credit contract.
Several banks did not support the proposal on the basis that they have a high standard of practice in relation to the manner in which they sell insurance and also asked the question: Why should credit related insurance be held to a higher scrutiny than any other insurance related product?
There was some comment from others in the non-bank lending industry with some support for the proposal but this was tempered with positions of comfortableness with the current situation.
Generally speaking, there is support for the proposal, however, there is some hesitation regarding the potential for the message to ‘get lost'. Further, it is considered that insurance disclosure is generally of sound quality.
