Public consultation of Application Paper on how to achieve fair treatment for diverse consumers
The consultation closed on 25 September 2024.
Background information
Diversity, equity and inclusion (DEI) is one of the IAIS’ key strategic themes in recognition that advancing DEI within insurers’ organisations and in the way they operate their businesses supports better prudential and consumer outcomes.
This application paper focuses on the customer-facing aspects of insurance provision. It guides supervisors, insurers and intermediaries on a DEI perspective to interpret and fulfil existing requirements of Insurance Core Principle (ICP) 19 (Conduct of Business) so that fair treatment is achieved for diverse consumers. “Diverse consumers” refers to individuals who may be underserved, disabled, from different racial or cultural background, experiencing vulnerability, or otherwise have unique needs and characteristics that distinguish them from the majority customer base.
The paper explores the coexistence of risk-based pricing and DEI considerations, discusses examples of unfair treatment and outlines recommendations for driving fair treatment of diverse consumers using ICP 19. The goal is to achieve fair and equitable outcomes for diverse consumers by addressing any systemic and idiosyncratic inequities and considering cultural nuances, language preferences, literacy levels and unique risks faced by different cohorts of a population. The insurance sector should remain accessible, fair and responsive to the needs of all stakeholders in society.
Also related to DEI, earlier this year the IAIS consulted on an Application Paper on supervising diversity, equity and inclusion – the governance, risk management and culture perspective. That consultation is now closed, and the IAIS is in the process of reviewing the comments received. Later this year, the IAIS will consult on an update to the 2012 Application Paper on regulation and supervision supporting inclusive insurance markets.
A public background session webinar was held on 17 July 2024 14:00 – 15:00 CEST to present the application paper and answer any questions from stakeholders. A recording of the session can be found here.