Insurance cover

Geoffrey Bezzina of the Malta Financial Services Authority was kind enough to answer my letter about the raw deal insurance policies offer to consumers.

Firstly, I would like to say how heartening it is that insurance companies do in fact have a fund to compensate hit and run victims. My previous information, which mistakenly told me that no such fund existed in Malta, came from someone who runs two agencies and had done so for the last 40 years.

In its regulatory jurisdiction, the MFSA might wish to ensure that those engaged in running such a business are au fait with current business practices. It is good that the authority publishes leaflets for general distribution to the public and such information could assist anyone involved in the business as well.

While Mr Bezzina was kind enough to respond, the general thrust of his contribution sounded more like a spirited defence of the status quo of the industry's general approach in dealing with its customers.

I never suggested that insurance companies should provide cover for every eventuality. My main point was that exclusion clauses give with one hand and take with the other and that cover for medical expenses for holidays abroad are pathetically inadequate to cover medical costs for someone unfortunate enough to fall ill abroad.

I am not suggesting the MFSA should rewrite contracts between the parties. I am merely wondering if the MFSA has jurisdictional powers to ensure a balance is kept and if so should exercise it. Here are some chief points of contention which indicate that insurance companies are perfectly free to impose any terms they like whether or not these are fair to the consumer and consistent with protective legislation on behalf of the ordinary public.

The majority of insurance underwriters are foreign - mostly British. In every policy they ensure that any dispute is referred to a Maltese court. This is no compliment to our jurisprudence, it is in fact an insult and affords the insurance companies the benefit of low awards and the delay they seek whenever they are called to settle claims thus taking full advantage of the delays in Maltese courts of law. I do not believe the Maltese consumer is protected as a result.

It is impossible for anyone suffering from hypertension to obtain adequate holiday insurance. The provisos and exclusion clauses contained in a policy strongly favour the insurance companies. A higher premium may not be acceptable to an insurance company and the only way the policyholder can safely obtain a holiday insurance policy is to be in perfect health in which case he does not need any sickness cover at all.

In my case, a lost or stolen item costing Lm16 resulted in a Lm10 excess deduction. Is there anything the MFSA can do to abolish excess charges for small value items?

Mr Bezzina counsels the consumer to shop around for value policies to cover holiday risks. I am afraid I have seen no difference in policy conditions, which leads me to conclude that one is more advantageous than another. It seems a cartelised situation exists within the industry.

I was once the innocent party of a traffic accident involving my stationary vehicle. I was left without an alternative vehicle to use for a considerable period of time and had to threaten my insurers with legal action to get them to fulfil their obligations.

It is to be hoped the MFSA's supervisory jurisdiction over the industry compels the industry to do what is right towards its customers. Some industries enforce their powers by fines and other means available to them. Is the MFSA so endowed? There are many sources of complaints the consumer can level against the insurance industry in Malta as Mr Bezzina well knows.

It is an industry dominated by foreign underwriters and outside the reach of legal action in their own countries. I believe the MFSA should have sufficient powers to curtail any abuses by the industry and to maintain a fair balance between it and its consumers. Mr Bezzina does not give me the impression such powers are available and that the MFSA's role is no more than educative and advisory which does little to solve any grievance suffered by a genuine claimant.