1. August 2015 | 15
The Consumer Protection Code includes
a definition of a vulnerable customer
as; a natural person who:
a) has the capacity to make his or her
own decisions but who, because of
individual circumstances, may require
assistance to do so (for example,
hearing impaired or visually impaired
persons); and/or
b) has limited capacity to make his or
her own decisions and who requires
assistance to do so (for example,
persons with intellectual disabilities or
mental health difficulties).
Where a regulated entity has
identified that a personal consumer
is a vulnerable consumer, the
regulated entity must ensure that the
vulnerable consumer is provided with
such reasonable arrangements and/
or assistance that may be necessary
to facilitate him or her in his or her
dealings with the regulated entity.
It should be noted that the examples
provided in the Code of a vulnerable
customer being hearing or visually
impaired are for guidance only and should
not be deemed an exhaustive list.
The Central Bank’s focus on ‘Treating the
Customer Fairly’ should run parallel to
considerations as to whether a customer
may be deemed vulnerable. The onus is on
the Broker to ensure that it acts in the best
interest of its customers, to sell suitable
products and to explain to a customer why
a product is deemed most suited to his or
her needs.
Beyond a physical or mental infirmity,
vulnerability may take other forms and is
as diverse as the people it affects. It spans
the spectrum of customers with a learning
disability, an example being dyslexia to
customers who have suffered an illness
with resultant memory loss..
From a Broker perspective, a regular
challenge is the customer with a poor
grasp of the English language. Practical
examples of the difficulties this causes
include;
l Issues in understanding the information
requested by a Broker to source a
quotation.
l Difficulties in understanding Statement
of Fact information.
l Problems understanding why an Irish
insurer may be unwilling to accept a no
claims bonus entitlement not earned in
Ireland or the UK.
l Poor understanding of the
consequences of non-disclosure of
a material fact pertinent to the policy
being purchased, e.g. failing to declare
main user, registered owner, fronting
consideration.
l Difficulties in understanding add-on
products or the process in the event of
a claim.
Beyond English language difficulties, it is
important to recognise that a customer’s
circumstances may change over time,
possibly as a result of ill health which may
undermine a customer’s ability to fully
understand insurance terminology and
terms and conditions. So a customer with
no apparent vulnerability at the start date
of a policy may become vulnerable during
a policy year.
To ensure a ‘tone from the top’, it is
important to have a high-level policy on
customer vulnerability in place. This
means that the provision of information
and customer communication should be
viewed through a diverse customer lens.
A review of current process may identify
weaknesses which may be deemed to fail
the ethos of the Central Bank’s customer
focus but also leave the Broker with
difficulties during a file investigation by the
Financial Services Ombudsman following
a formal complaint or create difficulties in
the event of a Central Bank inspection. It
may also lead to a possible claim against
its professional indemnity policy in the
event of a disputed claim.
Any communication with a customer with a
possible vulnerability should be recorded
clearly on Broker systems to reflect the
details of the conversations, meetings, the
response and assistance provided and to
share the information within the Firm to
other relevant parties.
The process should be owned and
championed by senior management with
front-line staff receiving training to facilitate
proper conversations while complying with
data protection rules. The process must
be embedded with periodic assessment
and evaluation and may be a useful tool in
developing compliance-focused front line
staff performance reviews.
It is not unusual for a person with good
English to ring on behalf of a friend with
a poorer grasp of English, however, care
should be taken that sensitive policy
information (in breach of data protection
rules) is not provided inappropriately. It
may be preferable that such policyholders
are encouraged to visit the Broker offices
with a friend who can translate policy terms
in advance of the policy sale. This process
will inevitably slow the administration of
a policy and lead to additional file notes
and delays. In a busy office, particularly
in a personal lines high volume scenario,
the additional workload could easily be
brushed aside in an attempt to close the
file. IT systems are constantly evolving to
streamline process. In effect IT systems
are designed for the mythical ‘perfect’
customer who neatly fits into a set niche
or category. This streamlining exposes the
Broker to miss the signs of vulnerability in
potential or existing customers.
Maire McSherry, Compliance Officer, Wright Insurance Brokers
Compliance Column
Are you
‘Vulnerable’
aware?
“Beyond a physical or mental infirmity, vulnerability may take other forms and
is as diverse as the people it affects. It spans the spectrum of customers with a
learning disability, an example being dyslexia to customers who have suffered
an illness with resultant memory loss”