Fiji’s Insurance Sector on the Brink of Major Reforms: What’s Next?

The Consumer Council of Fiji has called on the Reserve Bank of Fiji (RBF) to revisit and modernize the Insurance Act of 1998, highlighting the necessity for enhanced protections within the insurance sector. Chief Executive Seema Shandil articulated these concerns during a recent submission to the Standing Committee on Economic Affairs, emphasizing the escalating number of complaints from consumers regarding major insurers.

Shandil underscored the need for legislative amendments to promote fairness and transparency for consumers. She suggested that policies should not only be clearer but also utilize plain language to improve consumer understanding. “We feel the Insurance Act should be amended to strengthen consumer rights and simplify policies for clarity. This includes using bolded fonts and larger sizes for exclusions and mandating pre-sale disclosures of terms and conditions,” she stated.

Additionally, Shandil recommended that the RBF implement random policy audits to identify and penalize instances of deceptive fine print. She called for annual reports to include not just claim rates but also denial rates, surrender values, and statistics on consumer complaints, which are crucial for maintaining accountability in the industry.

Reserve Bank Governor Ariff Ali acknowledged the delays in reviewing the Act but expressed optimism about reforms, with hopes that the updated legislation could reach Parliament by 2026. He noted that the evaluation process began under the previous government but was stalled by the COVID-19 pandemic, underscoring the importance of aligning local practices with international standards.

The push for modernizing the insurance legislation comes against a backdrop of significant industry challenges, including increasing consumer complaints and issues related to health insurance reimbursement processes. With a growing focus on enhancing protections and transparency, the collaborative effort between the Consumer Council and the government could lead to a more robust insurance sector that better serves the needs of the Fijian population.

The ongoing commitment to reforming insurance practices and strengthening consumer rights signals a progressive step towards fostering greater trust between insurers and consumers, potentially leading to a healthier economic environment for all Fijians.