The European Union, in its never ending quest to empower the consumer and redress the grievances of a free market economy (attention: SARCASM) a while ago decided to look into the are of insurance intermediaries. Salesmen and brokers. Germany has now enacted national laws based on the EU Directive. Since May 22, 2007, salesmen and brokers have to register and will become "certified", i.e. there is some requirement as to knowledge and financial soundness, including a mandatory insurance - one of the few cases, where those hurt by a new law also profit. What the EU possibly did not foresee is the insurance industry's reaction. This Sunday, the newspaper was full of ads by brokers and other players that they are now government certified or claim superior knowledge. Interesting aspect of Unfair Trading Law: at least in Germany, using a required license as a basis for a claim of singularity is considered to be misleading advertising.
The legislative also took care of lawyers: in the official reasoning, it is stated that some issues will remain open for the practical application and the courts to settle over time- Every lawyer who drafts contracts or counsels in a non-litigious situation hates these situations: either your caveats are loooooong, or you face potential liability.
The new law also poses a few problems for all telemarketers: the caller has to supply status information that, if curtailed to the minimum possible, will still take about 2-3 minutes to read to or tell the potential customer about. If this sounds bad, things go downhill from here: the law requires the intermediary to explain the general basis for his advice, ask individual questions as to the situation of the potential customer, make a suggestion and then send a documentation of this to the customer.
Wow.
Some of the better salesman now start their pitch with: laws to protect you require us to...
The same problem exists for websites: all that information needs to be on there and may need to be put into an individualized Q&A process. The website guys will love it: a lot of code will need to be written.
All in all, I am not overly optimistic. Rather, this law will bring about more than a few cases to clarify it, produce uncertainty (also for lawyers) and thus costs. These will not be borne by the insurance industry. This alone is for sure.
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