What is Insurance Consumer Protection?
Insurance consumer protection is a concept in the insurance business that states in detail, the social responsibility of producers to their prospective customers or consumers. It is an action aimed at preventing producers from destructive activities, without taking into cognizance their immediate profitability, the welfare of the customers, and wholesome contribution to human development.
However, Insurance markets are important in both the micro-and macroeconomics of
this way leads to a more efficient allocation of resources (Curak et. al, 2000).
These perves ways for risk-averse individuals in making huge purchases such as real estate and
growth (Outreville, 1990; Ward and Zurbruegg, 2000; Curak et. al, 2009).
Because of complexity and uncertainty, it is not possible to
safeguards are therefore essential to promoting healthy financial markets.
misrepresentations, or unwarranted risk in insurance transactions or practices.
The very regulatory concerned bodies include the architectural design of insurance business, including contractual language; insurer selling procedure or methods, sales equipment, and advertisements; insurer underwriting and
insurance coverage denials; insurance pricing; and claims payments or reimbursement of premium.
However. Regulator actions may take on several dimensions, including promoting market transparency, restricting
How Does Consumer Protection Positively or Negatively Affect my Business?
Consumer protection is a concept that gained general acceptance following industrialization and mass production. the following are the positive and Negative effects of consumer protection.
Positive Effect of consumer protection
a. Consumer protection provides speedy redress to consumers’ complaints through negotiation, mediation, and conciliations.
b. Consumer protection facilitates the adoption of appropriate measures to ensure that products are safe either intended or normally safe use.
c. Consumer protection plays the primary role in safeguarding or protecting producers or consumers’ unwarranted risk in insurance transactions.
d. Regulates and states a reliable procedure for claim settlement
e. Any act of misrepresentation in terms of premium settlement is an offense and must be properly handled by the regulating law guiding the consumers of the insurance business.
The negative effect of consumer protection
- The misleading advertisement may enrapt most time misleading customers
- Providing misleading information during a sales negotiation by some dubious producers
- Some consumer protection agencies usually collect bribes, thereby perving way for an unlawful product to graze the market.
- Nonchalant attitudes of some consumer regulating agencies over their work will always cause severe havoc to the consumers.
Consumer protection is about treating customers fairly and honestly. Here are the most important things you need to know about your consumer protection responsibilities. Customers are the sustaining force of any business, this is because if customers are treated well, there will be an all-around improvement in your business.
But if consumers are not well treated it will bring a controversial issue that may likely lead to the failure of the business in question.