1. A licensee is prohibited from engaging in any act or omission that constitutes an unfair practice in the business of insurance.

2. For the purpose of these Guidelines:

1. An act or omission that constitutes an unfair practice in the business of insurance is an act or omission that is, or reasonably foreseeable to be, prejudicial against the rights and interests of consumers in violation of the general notion of fair dealings; and
   
   
2. Engaging in an unfair practice includes an act or omission committed by a licensee through any person acting on behalf of the licensee in connection with the carrying on of its licensed business.

3. Practices which are deemed to be unfair, include but are not confined to, practices set out in the following parts A to I:

A. Misrepresentations and false advertising of insurance policies
Making or causing to be made any estimate, illustration, circular or statement, sales presentation, omission or comparison that:

Misrepresents the benefits, advantages, conditions or terms of any policy, for the purpose of inducing or tending to induce the purchase, lapse, forfeiture, exchange, conversion or surrender of any policy or avoiding claims;

Misrepresents the bonus or share of the surplus to be received on any life policy;

Is false or misleading as to the bonus or share of surplus previously paid on any life policy;

With respect to non-guaranteed features of a life policy, fails to caution that past performance may not be illustrative of future returns; or

Misrepresents or is misleading as to the financial condition of any insurer.

B. False information and advertising generally
Making or causing directly or indirectly to be made, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any insurer in the conduct of its insurance business, which is false or misleading.

An "advertisement, announcement or statement" includes every form of advertisement, announcement or statement, whether spoken or written, and whether: -

I. By the display of notices

II. By means of catalogues, price lists, circulars, brochures or other documents or materials;

III. By the exhibition of promotional films, pictures or photographs; or

IV. By means of radio, television, Internet, telecommunication or any other similar means.

C. Collusive actions
Entering into any collusive agreement or arrangement resulting in or tending to result in the unreasonable restraint of, or monopoly in, the business of insurance. This part does not apply to any tariff of premium rates or policy terms and conditions that have been approved by the Bank under section 144 of the Insurance Act 1996 or any other arrangement approved by the Bank.

D. Coercive tied selling practices
Imposing undue pressure on, or coercing, a person to purchase another insurance policy from a particular licensed insurer, including the licensed insurer and any of its affiliates, as a condition for purchasing an insurance policy. In determining whether undue pressure or coercion has been imposed, consideration may be given to:-

a) The individual purchaser's perspective as to whether the tied selling is coercive;

b) The nature of representation made by the insurer to the purchaser when offering the product requested;

c) Whether the insurance is required under law

d) Whether the insurance is a requirement imposed under established commercial business practices

e) Whether limited options exist for the purchaser to obtain the insurance required elsewhere.

An insurer is not prevented under this part from offering to a person a combination of products permitting a reduction in the cost of the packaged product, or from selling a product as a rider to a basic insurance policy.

E. Unfair discrimination
Making or permitting any unfair discrimination between policyholders, in particular: -

1. Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the premium rates or policy fees charged for any life insurance policy or annuity, or in the bonus or other benefits payable thereunder, or in any other of the terms and conditions of such policy;
   
   
2. Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the premium rates or policy fees charged for any accident or health insurance policy, or in the benefits payable thereunder, or in any other of the terms or conditions of such policy;
   
   
3. Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazard by refusing to insure, refusing to renew, cancelling or limiting the amount of insurance coverage on a general insurance risk;
   
   
4. Refusing to insure, refusing to continue insure, or limiting the amount of coverage available to an individual because of the gender, marital status, race, religion or national origin of the individual; or
   
   
5. Refusing to insure a person solely because another insurer has refused to write a policy, or has cancelled or has refused to renew an existing policy in which that person was the named insured, unless such action is the result of the application of sound underwriting or actuarial principles.

The application of sound underwriting or actuarial principles may include having regard to: -

1. An insurer's capacity to insure
   
   
2. The collective assessment of an insurer?s exposure to loss based on the overall portfolio of insurance products sold to a particular policyholder and/or the policyholder's loss experience over time;
   
   
3. Subjective considerations that are reasonably relevant to the decision to underwrite a risk; and
   
   
4. Market precedents that are themselves based on sound underwriting or actuarial considerations that would have also been relevant to an insurer's decision to underwrite a risk.

F. Misrepresentation in insurance applications

1. Making false or fraudulent statements or representations on or relative to an application for an insurance policy, for the purpose of obtaining a fee, commission, money or other benefits from any provider or individual person.
2. Preventing the person effecting insurance from stating material facts to an insurer, or inducing the person not to state them or otherwise misrepresent material facts to the insurer.

G. Default selling via automatic enrolment schemes
Sale of insurance through "opt-out" or automatic enrolment schemes whereby policyholders are automatically registered, without their consent, for new or additional policies unless they decline the offer by pre-determined deadline. This part does not apply to insurances, which are provided through such schemes at no additional cost to policyholders.

H. Unfair contract terms
Including in an insurance policy unfair contractual terms which causes a significant imbalance in the parties' rights and obligations arising under the insurance contract, to the detriment of the policyholder or beneficiary under the contract. This part does not apply to terms which have been individually negotiated or contractual terms which reflect mandatory, statutory or regulatory provisions. For this purpose, a contractual term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

I. Claims settlement practices

Failing to promptly settle claims to a policyholder or beneficiary under one insurance policy in order to influence settlements under another insurance policy.

Where a single insurance policy covers multiple risks that are clearly separable and capable of separate determination of liability, unduly protracting negotiations or settlement under one portion of the insurance policy where liability has become reasonably clear in order to influence negotiations or settlements under other portions of the policy.

Repudiating liability to indemnify a policyholder on grounds of non-disclosure of material fact which the policyholder could not reasonably be expected to have known to be relevant to disclose.

4. Paragraphs 3C and 3E do not apply to any procurement of insurance products or services by the Government.

POSITIVE DISCLOSURE REQUIREMENTS

5. A licensee or any person acting on behalf of a licensee must take reasonable care to ensure, before it carries on an insurance activity with or for a customer, that it informs the customer:-

1. In the case of a licensee, that it is licensed under the Insurance Act 1996 (Act) and regulated by the Bank;
   
   
2. In the case of a person acting on behalf of a licensee, that it is an appointed representative of a licensee that is licensed under the Act and regulated by the Bank;
   
   
3. Where an insurance policy is to be arranged through an insurance intermediary, of the identity and location of the licensed insurer underwriting the policy;
   
   
4. Of existing arrangements for handling complaints that are available through the insurer, the Bank or the Financial Mediation Bureau;
   
   
5. Of the policyholder's duty of disclosure under Section 150 of the Act;
   
   
6. Of the nature of cover provided where this is not clearly apparent, or is reasonably likely to be misperceived, from the name or title of the policy; and
   
   
7. Where a policyholder may refer for details of the policy term and conditions as well as his obligations under policy.

6. The information above must also be made available or accessible, having regard to the circumstances of the policyholder, in written form for the retention and reference of the policyholder either at the point of sale or within reasonable time thereafter. This paragraph does not apply if the information has already been given to the customer in written form on a previous occasion and that information is still accurate for the insurance activity to be carried on.