Product disclosure a failure, NIBA tells inquiry

Product disclosure a failure, NIBA tells inquiry

Regulators are now coming to realise that product disclosure obligations don’t work, don’t result in better informed consumers and don’t lead to them making better decisions about financial products, NIBA has told the Financial Services Inquiry.

NIBA’s submission was filed on Monday, and advocates greater promotion of the valuable role qualified insurance brokers can play in providing advice to consumers on their insurance needs. It is NIBA’s belief that product disclosure obligations can only play a limited role in leading consumers to make better financial decisions.

NIBA’s submission states: “No amount of financial literacy and education programs will produce ‘confident and informed consumers’ of risk insurance products – the community does not understand and appreciate the nature and extent of risk, and the community will never become familiar with the nature and extent of insurance products and policies that are available in the market.

“In these circumstances, NIBA respectfully submits that the only realistic way to achieve confident and informed consumers of insurance risk products is to promote financial literacy followed by the need to seek qualified, professional advice from a licensed adviser who is experienced and expert in risk and insurance matters In other words, an insurance broker.”

You can read more details about NIBA’s submission here.

You can access NIBA’s entire sumission here.

Last changed: Apr 05 2014 at 12:53 PM