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> Total value of premiums paid for insurance almost doubled between 1998 and 2003  
  21 March, 2005   


The conference organised last week by the Consumers Affairs Council with regard to health insurance provided a very fruitful discussion indeed. It came at a time when, both at domestic and European level, efforts are being maximised to protect consumer needs within all sectors of services or products that we might make use of or require. One of these is health insurance.

Health insurance can be defined as financial protection against the health care costs that might be incurred by an individual. Although the term is often used by policy-makers to refer to comprehensive cover, insurers and regulators also use it to refer to other forms of cover such as long-term care insurance, supplemental insurance, specified disease policies, and accidental death and dismemberment insurance.

The purchase of a health insurance policy by an individual involves a contractual relationship whereby an insurance company agrees to reimburse the insured for health care costs in exchange for a premium. The contract (policy) generally stipulates the type of health care benefits covered, as well as the costs to be reimbursed.

As far as regulations concerning health insurance are concerned, this sector is currently governed by general insurance legislation. Moreover, it is worth mentioning that the Consumer and Competition Division is currently examining the possibility of introducing a block exemption concerning agreements and concerted practices in the insurance sector.

Such a block exemption, if adopted, would be applicable to certain specified types of pooling and information-sharing agreements between insurance companies in all sectors. In analysing this possibility, I must emphasise that both the interests of both the consumers and of the insurance providers will be borne in mind.

The seminar organised last week was held as part of activities marking World Consumers Day, an annual day for celebration and solidarity in the international consumer movement. World Consumers Rights Day involves initiatives concerned with raising consumer awareness.

Such activities can draw attention to unethical marketing practices, expose hazardous technolo- gies and production processes, or point out the need for consumer legislation and its enforcement. Whatever their objectives, activities held in connection with World Consumer Day share the same underlying aim of bringing about important and needed benefits for consumers.

World Consumer Rights Day was introduced in 1983 by Consumers International (CI) and is observed every year on 15 March. The day’s activities focus on the eight basic consumer rights: access to basic goods and services, to safety, to choice, to information, to representation, to redress, to consumer education and to a healthy environment. By coordinating and promoting World Consumer Rights Day, Consumer organisations help to ensure that these rights are given high priority by all governments at the international level.

The major objective in observing World Consumer Rights Day continues to be to facilitate discussions among the public and to collaborate and hold discussions with other relevant agencies and stakeholders.

Discussions such as the one that took place last week have resulted in the past in recommendations for action to be taken by government and other consumer protection agencies for the general good of the economy and society.

I believe that it is of the utmost importance, especially in the case of health insurance – which very often assists customers when they are sick and thus in a vulnerable position – to ensure that the consumer is well-informed about all aspects of the health insurance policy which he or she has purchased.

I therefore urge potential consumers to make sure that any insurance company or intermediary that they approach has a license issued by the MFSA. Furthermore, if anyone meets a sub-agent outside his place of business, they must ensure that he identifies himself and the company he represents.

Consumers must not be pressured into buying something about which they are not convinced. And they must make sure that they receive all the necessary documents they need to in order to decide what insurance to purchase and to understand the cover afforded.

It is important that the consumer is informed that, when purchasing a policy, the insurer or insurance intermediary must, among other obligations:

• make sure that all the information given is clear, fair and not misleading;

• clearly explain the customer’s entitlements under the policy and what the policy does not cover.

Before the consumer buys an insurance policy, he should have sufficient information – and understand it – in order that he can make an informed decision.

On the other hand, I must state that I believe that health insurance companies are competitive and perform well in Malta. This is reflected in the number of health insurance policies which are continuously increasing every year. Just to give a brief example, the total value of premiums paid by insurance consumers has almost doubled, from Lm3.8 million in 1998 to Lm 6.3 million up to the end of 2003.

Health insurance companies in Malta can also provide new employment opportunities in Malta. In this regard, I am informed that a number of world-renowned foreign insurance companies are considering moving most of their back-office operations to Malta.

With regard to last week’s event, I would like to thank the Consumer Council for its efforts. These seek to promote a constructive, ongoing and frank discussion with a view to promoting more awareness of the problems faced by the various stakeholders involved. They also seek to ensure that consumers have access to full information about their rights and remedies and examine what measures may be implemented to ensure that the rights of consumers are adequately safeguarded. Such measures include the introduction of specific legislation for health insurance, the promotion of more effective self-regulation and the regulatory monitoring of the costs involved to consumers.

Censu Galea is Competitiveness and Communications Minister

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