Insurers, are your insurance product summaries ready?

In English

July 9

Written by Claire Farnoux, attorney and simplification consultant

Transforming a collection of distribution guides into summaries without compromising accuracy is a colossal task for insurers. Keeping things simple is no easy feat! It also requires the expertise to pull it off—and the time to carry out these simplification projects.

Notice to distribution professionals without a representative! The Regulation on Alternative Distribution Methods took effect on June 13, 2019, and with it came the requirement for insurers to provide their clients with summaries.

Clear Summaries for 2020

What is the purpose of the summary? To enable your customer to make an informed decision about your insurance product. Without the help of a representative to guide them and answer their questions, your customer must be able to decide whether your product is right for their situation. More specifically, the summary should:

be concise,
explain your product and
“be written in a clear, legible, precise, and non-misleading manner” (Art. 28 of the Regulation).

You have until June 13, 2020, to get up to date and draft your summaries. Here are a few tips to help you prepare for this transition.

Share only essential information

You are already familiar with the distribution guides, which distributors have been required to provide to customers since 2000. These guides often faithfully reproduce the contents of the insurance policy and are frequently just as long as the policy itself.

From now on, you are required to be concise and provide only “the information essential for making an informed decision.” Your summary should therefore go beyond the insurance policy and present only the information most relevant to your customer. For example, someone who is hesitant to buy travel insurance may not need to read a detailed list of the documents required to file a claim!

Make sure to highlight this information

Your summary should be easy to read and highlight the essential information in your policy. The structure of your document is your most important tool for making it easier to read and locate key information.

Take the time to think about the structure of your table of contents so that it reflects your client’s logic rather than that of your policy. Choose strong, evocative headings rather than abstract or jargon-filled ones.

Here are two examples of titles that are full of jargon or too abstract, along with suggested ways to rephrase them:

Termination by the policyholder —> You may terminate this contract
Effective Date of Coverage —> You are covered starting from the beginning of your coverage period
Eligibility Requirements —> Who Is Eligible for Coverage

Use language that your client can understand on the first read

Policy documents are often written in language that may seem obscure and complex to your client. Distribution guides frequently suffer from the same shortcomings. The risk? Your client may feel helpless and give up reading before even getting started. After all, why waste time reading a document if you feel you’ll never be able to understand it?

To break out of this rut, write as if you were speaking directly to your client. To help you do this, create one or two personas that represent the characteristics of your target audience, and keep them in mind at all times while writing your summary.

Adopting this approach will help you draft your summary in clear language that your client will be able to understand on the first reading, and that will comply with your obligations under the Regulation.

The thorny issue of definitions

Without a doubt, a long list of definitions makes it harder for your client to understand the document. Worse still, they can mislead your client if they have the effect of limiting the coverage they are purchasing. To ensure your summary does not cause confusion or mislead your client, pay special attention to your definitions.

Finally: Make your table of contents appealing!

Don’t turn your readers off with formatting that’s too dull or cluttered! Don’t hesitate to consult graphic design specialists to highlight your new structure and ensure that your document is well-spaced and visually appealing.