The intervention of the Financial Services and Markets Authority (FSMA) has led to the price reduction or removal from the market of hundreds of overly expensive insurance products, according to the financial watchdog’s 2024 annual report.
FSMA Chairman Jean-Paul Servais stated that the regulator assesses whether insurance products provide sufficient "value for money" to consumers and acts if costs are deemed excessive, requiring insurers to implement corrective measures.
Specifically, the FSMA examined 178 life insurance policies with costs deemed too high relative to their returns, primarily unit-linked products, explains Yves Van Wassenhove from the FSMA.
Costs were reduced on 137 life insurance products by an average of 0.64%, which could result in 6% more capital after 10 years. The sale of 28 life insurance products was halted by insurers.
The FSMA also reviewed non-life insurance products, focusing on the proportion of premiums paid that is returned to policyholders.
If this percentage is too low, the FSMA initiates an investigation. Following FSMA’s intervention, 50 out of 56 scrutinised products, mainly including credit balance insurances, travel assistance insurances, and various "exotic insurances," were withdrawn from the market.
Van Wassenhove highlighted concerns about insurances like mobile phone purchase coverage, invoice insurance, and purchasing power insurance, questioning their value.
