New Zealand’s general insurers are unlikely to be forced to comply with a comparison site any time soon.
The idea was suggested as part of insurance law reform work by the Ministry of Business, Innovation and Employment.
It noted that it was sometimes difficult for consumers to get a clear view of what was available from insurers.
“Due to its complexity and the amount of information that must be provided to get a quote, it is often prohibitively time consuming for a customer to 'shop around'. Insurers also present policies in different ways so it can be difficult for a consumer to compare the information they get on a 'like for like' basis. Submissions on the issues paper noted that there is a lack of reliable sources a consumer can rely on for information to compare different policies. We also have received evidence of an insurer issuing a cease-and-desist letter to an insurance comparison website.”
It noted that the current settings allowed insurers to prevent third parties from creating a comparison platform, as is common in other countries.
Attempts to set up sites have previously been unsuccessful – former Vero chief executive Roger Bell tried to launch iCompare without success.
An option mooted by MBIE was to require insurers to work with platforms. That could happen by making it mandatory for them to engage with independent websites, prohibiting contractual terms that have the effect of prohibiting the use of publicly available information for price comparison purposes, or establishing a government-run website that insurers were required to work with.
It noted that care would have to be taken to ensure commercially sensitive information was not revealed.
After consultation, though, MBIE dropped the idea.
“There would likely need to be a high level of regulation applied to facilitate a comparison website (both in the information required of insurers and the operation of the website itself). The evidence is not clear at this stage that the benefit such a website would provide to consumers would outweigh the costs involved. We consider that further analysis would need to be undertaken before we can recommend an option relating to comparison websites.”
Instead, it wants insurers to give consumers information about their policies and business in a prescribed format.
“The availability of this information could be used to help consumers choose an insurance provider and to promote transparency by providing standardised information through which consumers could compare policies or insurers.
“This option was not explicitly consulted on as part of the options paper consultation. However, it is being considered as having certain information publicly available would likely assist consumers with accessing and comparing information before choosing an insurer. Consultation would be carried out before making any regulations setting out the details of information insurers are required to publish.”
