Manulife, the Manufacturers Life Insurance Company, has entered into a voluntary compliance agreement with the British Columbia Financial Services Authority (BCFSA) after that province’s superintendent of financial institutions found, based on an investigation, that a form of contract issued by Manulife was unfair and potentially misleading. The agreement notes that the superintendent may prohibit the use of that contract.
The contract and related advertising in use by Manulife, was related to a travel insurance policy for visitors to Canada. In the agreement it is noted that the superintendent is aware that claims were outsourced to a third-party claims management provider. It was also noted that the superintendent is of the opinion that Manulife failed to ensure compliance with the privacy protection terms set out in its outsourcing contract.
“The superintendent is of the opinion that Manulife failed to effectively and consistently communicate with an insured about the terms of a travel insurance policy and an insurance claim made thereunder, contrary to Manulife’s own code of business conduct and ethics requirement for fair dealing and resulting in harm to the interests of the insured,” the agreement states.
As the insurer had already taken steps to address the protocol breaches and to mandate training on privacy, complaint escalation and reporting, the BCFSA says the superintendent considers it appropriate to enter into the voluntary compliance agreement.
Under the agreement, Manulife must submit all proposed amendments to the contract, along with any templates and advertising that it proposes to use when carrying on travel insurance business involving the product in question. For 180 days, beginning 60 days after the agreement’s execution, Manulife must also submit any further amendments or replacements of advertising or representations and contractual changes related to the product to the regulator, along with any consumer complaints received.
It also agrees to incorporate explicit fair treatment of consumer (FTC) performance expectations into the contracts it has with parties acting on its behalf, along with language that grants Manulife the right to obtain any information necessary to develop a comprehensive understanding of consumer experience related to FTC. The insurer must also discuss FTC indicators it will use when assessing performance under these service agreements.
In lieu of the province issuing an administrative penalty, Manulife agreed to pay $15,000 and investigation costs totalling $4,000.
