Calls for fair practices in insurance
Consumers get a raw deal from insurers, being duped into committing capital that is not considered part of their investment, said participants in a conference on «Private Insurance and Consumer Protection,» the second of its kind, held in Thessaloniki last Friday and Saturday. The conference was jointly organized by the Legal Association for Consumer Protection and the University Research Center of the University of Macedonia. Lawyer Dimitris Spyrakos, one of the speakers, emphasized the lack of transparency in the relations between insurance companies and their clients, especially in life insurance. «The problem is found in the widespread practice whereby the initial premium paid, or, in certain cases, the premiums paid over a period of three years after a contract is signed, does not count toward the savings or investment but ostensibly covers the cost of the signing of the contract,» he said. Spyrakos said that clients must be clearly informed about their rights and obligations and especially over the costs of each term in the contract so that they can compare offers and choose the company they will be insured with. The way the contract terms are currently written is neither informative nor does it guarantee the clients’ rights. As things stand, clients waste part of their income and achieve lower-than-expected returns on their investment because of the term concerning their initial premium payments. Replying on behalf of insurance companies, Panos Dimitriou, managing director of Generali Hellas, countered that incorporating the first premium payments into the contract’s cost is a widespread global practice based on widely accepted accounting principles. He said that that the number of premiums counted against costs varies depending on the program on offer and that changing this practice would not necessarily result in a larger payment at the contract’s expiry. Another point of contention between consumers and insurers is the way risk is accounted for. Insurers said a number of factors, such as a client’s age, the rate of inflation, the company’s costs, the rise in the average cost of medical treatment and the insurers’ past experience with compensation payments are rightly taken into account in pricing an insurance contract. Consumer representatives countered that companies, especially when using their own past statistics from compensations, illegally place all the risk in the hands of their clients. A third issue concerned the access of insurance companies to personal data. There is a clash between the legislation governing the protection of personal data and the rights of insurers to get hold of such data, such as medical records. The former requires the client’s express, written permission each time an insurer wants to look at personal records. This, according to insurance companies’ legal advisers, actually works to the advantage of those who deliberately misrepresent their personal data in order to save on premiums or get additional coverage.