Insurance Industry Regulation Changes - Always be prepared

Clarity Not Optional

Coming insurance industry regulations are designed to ensure accurate understanding

You don’t have to spend very long with The Giles Agency team to realise we take being clear very seriously. And we’re not the only ones. Regulatory bodies have also recognised the importance of clarity, particularly in sectors like finance and insurance, where complex information must be accessible to all consumers, regardless of their level of expertise.

A number of regulations now mandate that information be presented in a straightforward and understandable manner. For instance, the ‘Plain Language’ requirement in financial services legislation obliges companies to communicate terms, conditions, and rights in simple language. These regulations aim to protect consumers by ensuring they have a clear understanding of their commitments and the services being offered.

This push towards clearer communication not only enhances the customer experience but also mitigates legal risks for companies by reducing misunderstandings and potential disputes. As such, the emphasis on clarity in both voluntary and regulated contexts has a key role to play in how organisations approach their communication strategies.

How GN16 set the bar

Back in 2015, we helped our insurance clients revamp their product brochures and customer communications when GN16 was introduced by the Office of the Commissioner of Insurance, Hong Kong’s insurance regulator. To enhance consumer protection for products like life insurance, long-term savings plans and medical insurance, GN16 or Guidance Note 16 on Underwriting Long-Term Insurance Business, outlines principles for treating customers fairly, and catering to their reasonable expectations.

Among other things, this meant that marketing materials and other customer communications needed to be more explicit in terms of benefits, risks and caveats, so that customers could gain a clear and accurate understanding of the product. It also meant that legalese went out the window. All customer communications had to be written in plain language that anyone could pick up and understand.

GN16 signalled sweeping changes across the Hong Kong insurance industry, prompting insurers to not only re-evaluate their communications, but also refresh their tone and messaging for a new generation of savvy consumers. In the year that followed, we reviewed and revamped a mountain of sales materials, infusing them with a more direct, personal and human brand voice. We also developed frameworks for communicating technical concepts in layman-friendly language to meet industry requirements.

More changes afoot

And now another mandate is on its way. This one focuses on the illustrative examples many insurers use in their product brochures, and insists they showcase conservative outcomes rather than best case scenarios. Specifically, this means capping the policy returns shown at 6%. The aim is to paint a clear and accurate picture of what to expect so that consumers can make sound, informed decisions.

Once again, the work will be substantial but we’re confident the mandate will have a positive impact. And with just weeks before launch, the Giles team are on standby to get the job done quickly and efficiently.

If your team needs support in ensuring compliance with the coming regulatory changes, just reach out.