Medical jargon is also singled out. The AMF points out that the contracts “often include complex and technical terms specific to the fields of medicine and insurance […] incomprehensible to the consumer.
Based on data provided by insurers, the regulator reveals that 20% of AMG claims are refused, while a “refusal rate above 10% should raise questions among insurers”. More than 60% of insurer denials are related to limitations or exclusions, pre-existing conditions, failure to meet the definition, and survival and elimination periods, according to the report.
The AMF recommends using statistics and advertising slogans that “do not lead to an erroneous understanding of the product”. Consequently, it asks the industry “to further assist the consumer so that he adequately understands the product”.
To do this, “insurers should improve their training programs and provide appropriate reference tools to distribution networks, so that they can adequately assume their roles and responsibilities towards their customers, particularly their support role and, if necessary, advice”.
Do the AMF’s criticisms and recommendations hit the target? Among the connoisseurs of distribution joined by Finance et Investissement, opinions are far from unanimous.
“This report is both damning and embarrassing. For a long time, many advisers do not even want to touch [à l’AMG] ! The industry must take note of this and change its modus operandi,” said Robert Landry, former executive vice-president at AXA Canada.
For his part, Daniel Guillemette, president and founder of the financial services firm Diversico Finances Humaines, reports having seen “few catastrophic situations in critical illness insurance” in more than 35 years of career.
Same story with David Benamron, Executive Vice-President, Insurance at Botica Financial Group: “In the more than 20 years that I have worked in insurance, I have rarely seen problematic cases in critical illness insurance claims. The definitions are standardized, which removes a lot of uncertainty. But that does not mean that the AMF’s criticisms are irrelevant! »
The president of the general agent Financière S_Entiel, Dominic Demers, believes in the virtues of the AMG. “With us, we do promotions so that advisors sell this product and not just life insurance. Critical illness insurance can make a huge difference in people’s lives, but there is a need for greater clarity in product presentation,” he argues.
The type of statistics the AMF used may have inflated the claims problem, adds Caroline Thibeault, managing director of general agent Groupe SFGT.
“The individual insurance and group insurance sectors have been amalgamated [dans le rapport]. However, clients of group insurance contracts do not have the same quality of advice as in individual insurance. It is rarely personalized. From there, collective clients will be more likely to believe that cancers, heart problems and other serious illnesses will result in compensation,” she says.
Marie Elaine Farley, President and CEO of the Chamber of Financial Security (CSF), notes the vagueness of the report about distribution channels. “The report notes that it included plans without representatives. What is the proportion of claims from plans without representatives? We ignore it! “, she says.
According to the report, “nearly 80% of premiums written are written through a certified representative for policies with typically larger coverage amounts and broader coverage than products offered under a distribution without representatives, which nevertheless constitutes the majority of critical illness insurance sales”.
Do you have to be a doctor or an oncologist to decipher the definitions of serious illnesses in the contracts? “There is a golden rule,” says Caroline Thibeault. He must tell his clients that only serious illnesses that threaten life will lead to the payment of indemnities. »
This is the key word among the advisors concerned: a serious illness covered by contract must necessarily be “threatening” to life.
Daniel Guillemette believes that “the best way to talk about the product to its customers is by insisting that the serious illnesses covered by the contract have a strong potential to lead to death”. According to him, this message is “generally well transmitted and well understood. But the nature of serious illnesses will inevitably lead to many denials of compensation. When in doubt, there will always be a request for a claim, whereas in life insurance, things are so much simpler… you live or you die! »
Has the sale of AMG by disseminating alarming statistics on the probability of cancer had its day? David Benamron is convinced of this. “It’s time to improve the marketing of the product,” he says.
According to him, this marketing strategy does not hold the attention of the key clientele of the AMG, that of wealthy people. “We mainly sell it to corporations as part of tax strategies that provide for the recovery of premiums paid. It is also sold as income protection, for small sums, to family customers,” says David Benamron.
Dominic Demers adds that customers should be better informed: “Insurers should produce explanatory tools that speak to customers. There should be concrete examples understood by all.”
According to Daniel Guillemette, some advisors are obsessed with insurer advertisements. “A good advisor is thoroughly informed about the characteristics of the product. Unfortunately, some make the mistake of relying on advertisements because they lack product knowledge,” he laments.
Judging by the words of Daniel Guillemette, the training needs are real. This is also the opinion of David Benamron, who asserts that “some advisers do not understand the product. And they don’t want to sell it! »
At the CSF, we say we are ready to act. “If insurers want to build training on products such as critical illness insurance, we are ready to accredit them and even create partnerships,” says Marie Elaine Farley.
The AMF condemns the use, in contracts, of medical jargon that obscures the understanding of the product. What would happen if these contracts were written in a language accessible to everyone?
“If the definitions of serious illnesses were written in simple, everyday language, there would be more claims,” says Robert Landry. Insurers would be forced to withdraw certain coverage or raise premiums. If that happened, then critical illness insurance would leave the family market and become a premium product. »