Telephone advice in statutory types of insurance

The Financial Supervision Authority (FIN-FSA) reminds non-life insurance companies engaged in statutory types of insurance of the obligation contained in the Administrative Procedure Act to provide advice as well as the requirement to provide advice free of charge in telephone service. The same obligation also applies to other entities engaged in statutory insurance business. 

Entities engaged in statutory insurance business must ensure that customers have the opportunity to receive free of charge the advice required by the Administrative Procedure Act on claims and insurance matters in statutory types of insurance.

Regulation

The Administrative Procedure Act also applies to private actors in the performance of public administration tasks. The Act therefore applies to insurance companies in the performance of public administration tasks, such as claims and insurance activities in motor and accident insurance.

Chapter 2 of the Administrative Procedure Act contains general principles of good administration, which must be taken into account in all activities related to the performance of a public administration task. The principles of good administration include, for example, advice and the closely related service principle of an authority. Pursuant to chapter 2 section 8 subsection 1 of the Administrative Procedure Act, authorities must provide to their customers the necessary advice, within their competence, for taking care of administrative matters and must respond to questions and queries about their service. Advice is provided free of charge.

In a number of decisions concerning the authorities, the Parliamentary Ombudsman of Finland has outlined what is required with regard to providing advice free of charge in telephone service pursuant to section 8 of the Administrative Procedure Act and how telephone advice and its pricing should be communicated. If customers ask an authority for advice by telephone, one can require that they bear the normal costs of their own landline or mobile phone connection when calling a regular telephone number. On the other hand, the provision free of charge of telephone advice requires that the advice does not, for reasons attributable to the authority, result in costs to the customer exceeding the normal price of a telephone call.

The Ombudsman has emphasised that an authority’s obligation to provide advice free of charge requires the authority to provide procedural, factual and legal advice as well as to answer questions about the service. An authority’s telephone service must be arranged in such a way that a customer interacting with the authority can reach free of charge the official handling or processing their case and also receive procedural advice and answers to questions and enquiries about the service free of charge.

According to the Ombudsman, an authority that has both premium rate and non-premium rate telephone numbers should ensure that the prices of the various telephone numbers are appropriately and comprehensively communicated to the authority’s customers and that customers are instructed to use the non-premium rate numbers in their communications with the authority.

According to the Ombudsman, websites should state directly the cost of calls made to different numbers, so that customers have an immediate and clear understanding of what they will have to pay to call these numbers. Cost information should not have to be retrieved separately from another web page detailing the cost of telephone calls.

Telephone advice in non-life insurance companies

Non-life insurance companies engaged in voluntary and statutory insurance business must ensure that customers have the opportunity to receive free of charge the advice required by the Administrative Procedure Act on claims and insurance matters in statutory types of insurance. The company may have, for example, a non-premium rate help line or non-premium rate service numbers for telephone advice on statutory types of insurance. In addition, the company may have other service or contact numbers for which the customer pays a premium rate when calling them. When a customer calls the company’s switchboard, the customer must, if necessary, be connected or directed to the non-premium rate number.

The FIN-FSA considers it very important that insurance companies clearly communicate on their websites, in customer materials and in other relevant contacts about non-premium rate advice numbers and help lines, and guide customers in an appropriate manner to use them. Clear communication includes the fact that these service numbers are easy to find. Non-premium rate service numbers should not be hidden behind links or presented in a smaller or less noticeable text style than other service numbers. Websites should clearly state what it costs to call different service numbers.

Particularly in claims cases for statutory types of insurance, customer guidance should be clear so that customers can easily reach the person dealing with their case and receive advice by telephone at no extra charge. Referring to section 8 of the Administrative Procedure Act and to decisions made by the Parliamentary Ombudsman on the obligation to provide advice, the FIN-FSA considers that if customers, in claims decisions for statutory types of insurance, are instructed to contact a designated claims handler directly by telephone, then customer should not incur any extra charge for using these telephone numbers. The same correspondingly applies to situations in which insurance companies, in the course of some other activities deemed to be solely for the purpose of performing a public administrative task, direct customers to contact a designated employee by telephone.

Action required of insurance companies

The FIN-FSA urges non-life insurance companies to ensure that the requirements of the Administrative Procedure Act related to providing advice free of charge and clarity of communication have been taken into account in telephone advice on statutory types of insurance.  

The FIN-FSA recommends that companies that have both premium rate service numbers and non-premium rate advice numbers regularly monitor incoming calls to the different service lines. If a company finds that customer calls that should clearly go to a non-premium rate line are going to premium-rate service numbers, the company must take action to improve customer guidance.

The FIN-FSA monitors the regulatory compliance of telephone advice as part of ongoing oversight of procedures.

For further information, please contact

Kati Neuvonen, Legal Advisor, tel. +358 9 183 5336 or kati.neuvonen(at)fiva.fi