Online selling - Differences with conventional distribution channels

Both, traditional and digital distribution channels are regulated by the same regulations in Belgium.
However, as the legislator is aware of the need to provide additional protection in the case of online contracting, there are certain particularities that are reinforced, such as the pre-contractual information duties, the right of withdrawal, the provision of non-requested services, etc.

The only relevant regulatory difference with traditional distribution, which is not specific to online selling but is common to all means of distance selling of insurance products, is the right of withdrawal of the consumer policyholder within a 14-day timeline following the conclusion of the contract (or, if later, the reception of precontractual information and contractual terms and conditions on a durable medium).

Current regulatory frameworks do not distinguish digital and so-called traditional distribution.
Nevertheless, the Italian legislator requires some additional precautions aiming at protecting the user/consumer when insurance products are sold at distance or online. For example, the distributors have more intense pre-contractual information duties, the consumers have a right of withdrawal bylaw, it is forbidden the provision of non-requested services etc.

Both digital and traditional distribution are essentially subject to the same rules.
However, in respect of digital distribution it should be also considered the legal framework applicable to contracts negotiated at distance (Decree Law no. 95/2006, transposing the Directive concerning distance marketing of consumer financial services). This legal framework establishes reinforced duties of information in respect of: i) the insurance intermediaries; ii) the insurance contract; and iii) the protection mechanisms available (out-of-court means of dispute resolution and the existence of guarantee funds or other compensation arrangements). These duties need to be fulfilled prior to the conclusion of the insurance contract and to be provided in a durable medium. In addition, it is also foreseen a general rule granting the consumer’s right of free termination of the contract, without giving any reason and without any kind of penalty, within a period of 14 or 30 days, as applicable, from the date of conclusion of the insurance contract.

As both distribution channels are basically regulated by the same legal framework, the essential core of both remains the same.
However, if an insurance is distributed through online rather than through traditional channels, there are certain particularities that need to be taken into account, such as, for example, a wider range of pre-contractual information duties and the right of withdrawal.

Current regulatory framework does not clearly distinguish digital and so-called traditional distribution.
However, companies should take into account the e-commerce legislation, which applies to retail customers (not B2B) and sets out rules for conclusion of contracts via digital means. It provides an opportunity to express offer and acceptance using e-messages/e-letters and conclude insurance contracts using a digital signature. At the same time, it requires for certain detailed disclosures of information at the time of e-offer and must be aligned with general insurance legislation.

Both distribution channels are regulated by the same rules.
However, firms should consider the rules concerning distance marketing and e-commerce activities (each of which is covered in ICOBS 3 in the FCA Handbook), which generally stress the need to make sufficient disclosures and ensure that key information is provided in a durable medium.

Insurance Online distribution also is governed by provisions of Law 22/2007, of 11 July 2007, on distance marketing of consumer financial services. This law stablishes several requirements for online distribution, including the need to provide additional precontractual information to customers.
As regards right of withdrawal, this law includes longer time limits for consumer withdrawal, allowing it within a period of up to one month.
Likewise, under this rule online distributors are not allowed to communicate and provide services not requested by the consumer, and therefore the express consent of the consumer is required in all cases.
Nevertheless, the legislator is aware of the need to provide additional protection in the case of online contracting, as the current law dates before 2007.