MFSA finds gaps in insurance costs and customer protection

The Malta Financial Services Authority (MFSA) has identified several shortcomings in how insurance companies assess their products, explain costs to customers and handle complaints.

The findings come from two reviews examining whether insurance products offer customers good value for money.

The first review focused on life insurance policies linked to investments, while the second examined insurance products sold by Maltese-licensed companies in other countries.

The MFSA examined products offered by four insurance providers, covering around 44.4 per cent of investment-linked life insurance products offered by locally licensed companies.

These policies combine life insurance with investments, meaning their value can change depending on how the investments perform.

The regulator found that some insurers were not providing sufficiently clear or updated information about costs.

There were also shortcomings in how companies checked whether their products were suitable for customers and monitored the investments linked to their policies.

In some cases, insurers could not provide enough evidence that they had assessed how long customers would need to wait before recovering their costs or what happened when customers ended their policies early.

The MFSA is now calling on insurers to provide clearer information about charges and regularly check whether their products are delivering good value to customers.

Concerns over travel, health and gadget insurance

The second review looked at insurance products sold abroad by companies licensed in Malta, including travel, gadget, accident and health insurance.

The MFSA found that some companies had not properly documented how their products were approved or reviewed.

It also identified cases where insurers had not sufficiently explained certain charges and commissions.

Another concern was how companies monitored insurance claims and customer complaints.

According to the regulator, insurers need to pay closer attention to these issues to identify problems early and ensure customers understand what their insurance covers, as well as what it does not.

Insurers expected to address shortcomings

Following the reviews, the MFSA has called on the insurance companies concerned to examine their practices and make improvements where necessary.

It stressed that companies should not only check whether a product offers good value when it is first introduced, but continue doing so for as long as it remains available.

The regulator said it will continue monitoring the sector to ensure insurance products are suitable for customers and offer fair value for money.