The 'Dematerialized' Insurance (eBook)

Preface 6
Contents 8
List of Contributors 10
Abbreviations 12
Part I: On-Line Distribution 14
European and International Online Distribution of Insurance Products 15
1 Professional Insurance Intermediaries, the Distribution of Insurance Products and the Internet 16
1.1 General European Issues 16
1.1.1 Overview 16
1.2 IMD 2, ECD and the EU Law on Information Duties to Customers in the Online Business 17
1.3 From a Law on Intermediation to a Law on Sales of Insurance Products 23
1.3.1 Intermediaries Under EU Secondary Legislation 23
1.3.2 Marketing of Insurance Products with Investment Elements 27
1.3.3 Conclusion 29
2 The Impact of Electronic Commerce on the Distribution of Insurance Products 29
2.1 E-Commerce and Insurance Intermediaries 29
2.1.1 E-Commerce Does Not Aim to Replace Insurance Intermediaries 29
2.1.2 E-Commerce Favours the Distribution of Simple Insurance Products 29
2.1.3 Comparison Websites 30
2.1.4 Conclusions 31
2.2 E-Insurance Intermediation and Cross-Border Transactions 32
2.2.1 Freedom of IIM Services 32
2.2.2 When Is a FoS Notification Necessary? Should Notification Cover All MSs Where the Site of the Intermediary Is Accessible? 33
2.2.3 Cross-Border Online Business and the FoE of the Intermediary 34
2.2.4 Cross-Border Transactions via a Representative in the Country Where the Service Is Rendered 36
2.2.5 Procedural Matters 38
2.2.6 Priorities of the EU Which Affected E-Insurance Intermediation 38
2.3 Online Freedom of Services vs ``Traditional´´ (Offline) Freedom of Services 40
2.4 Communications via E-Mail with Insurance Intermediaries and Online Selling of Insurance Products 40
3 Worldwide Aspect 41
3.1 The Borders of the Online Market: Geographical, Technological and Regulatory Means 41
3.2 Third Country Online v EU Online Insurance Intermediaries 42
3.3 E-Commerce Within Non-EU Countries 44
4 Final Remarks 46
References 49
E-commerce and Distribution of Insurance Products: A Few Suggestions for an Appropriate Regulatory Infrastructure 50
1 Introduction 51
2 Risks and Insurance Regulation Concerning E-commerce 52
2.1 Risks of E-commerce and Business Conduct Regulation 53
2.2 Risks of E-commerce and Prudential Regulation 54
3 Current Developed Insurance Regulatory Infrastructure 55
3.1 European Union 55
3.2 United States 57
3.3 Canada 58
3.4 China 60
3.5 Issues Relating to the Regulatory Structure 61
4 Consumer Protection and Disclosure Regulation 62
4.1 Fundamental Limitations of Disclosure Regulation 63
4.2 Some Suggestions for Current Information-Based Regulation Based on the Behavioural Biases 64
4.2.1 Information Asymmetric and Complexity of Insurance Products 65
4.2.2 Information Overload and E-Commerce 66
5 Concluding Observation 67
References 67
Journal Articles 67
Book and Book Chapter 68
Online Documents and Articles 68
The EU Regulation on Comparison Websites of Insurance Products 70
1 Introduction 71
2 The Consumers Associations perception of Comparison Websites 74
3 The Supervisory Authorities perception of Comparison Websites 76
4 The EU Rules Applicable to the Comparison Websites 81
4.1 The Insurance Mediation Directive 81
4.2 The Unfair Commercial Practices Directive 82
4.3 The Enforcement of the Unfair Commercial Practices Directive. A 2015 Case on Comparison Websites of Insurance Product Asse... 84
5 The Upcoming EU Rules Applicable to Comparison Websites 86
5.1 The Insurance Distribution Directive 86
5.2 The Product Oversight and the System of Governance: The Monitoring Role of the Insurance Undertakings 89
5.3 The Good Practices on Comparison Websites Issued by EIOPA 90
6 Possible Developments in the Comparison of Insurance Products and New Challenges for Regulators 92
Insurance Companies and E-Marketing Activities: An Empirical Analysis in the Italian Market 96
1 Introduction 98
2 Marketing, Technology, and Insurance Framework 99
3 Studies Related to E-Marketing and E-Service 100
4 Service and E-Service Quality Dimensions and Management 104
5 Previous Research Hypotheses Related to Current Study 106
6 Research Gap and Study Objectives 108
7 Research Design and Methodology 109
8 Model Design 109
9 Sample and Questionnaire Design 111
10 The Model: Hypotheses Testing 111
11 Comparison Model: Benchmarking 115
12 Conclusion and Management Implications 118
References 120
Part II: Distance Selling 125
Insurance Online: Regulation and Consumer Protection in a Cyber World 126
1 Introduction 127
2 The Growth of Online Sale and Distribution of Insurance in the United States 129
2.1 Life Insurance 130
2.2 Property Casualty Insurance 131
3 Insurance Regulation in the United States 132
4 Regulation of Insurance Sales and the Internet 136
4.1 Applicability of Regulatory Scheme to Online Marketing 137
4.2 The Can-Spam Act and Regulation of Commercial Email 138
4.3 Insurer Data Security and Consumer Protection 140
5 Cybersecurity, Cyber Risk, and Cyber Insurance 142
5.1 Data Management and Cyber Breaches 142
5.2 Cyber Insurance 144
5.2.1 Market Growth 144
5.2.2 Types of Cyber Insurance 145
5.3 Regulation of Cyber Risks and Cyber Insurance 148
References 151
Online Sales of Insurance Products in the EU 152
1 Online Sales from a Marketing Point of View 153
1.1 The Impact of Online Sales 153
1.1.1 Reduction of Distribution Costs 153
1.1.2 Purchasing Experience 154
1.1.3 Niche Market 155
1.2 Benefits of Online Sales 156
1.3 Maximizing Online Sales Effects 156
1.3.1 Search Engines 156
1.3.2 Constant Direct Communication with Prospective Clients 156
1.3.3 Clientele Analysis 157
1.3.4 Diffusion of General Market Information 157
1.3.5 Exchange of Information 157
1.3.6 Retaining a Level of Communication and Reaching Mass Audiences 157
1.3.7 Use of Databases 158
1.4 Insurance Online Sales in Particular 158
2 The EU Policy for E-Commerce 159
3 Online Sales of Insurances in EU Law 164
3.1 The Philosophy Behind Distance Sales Regulation 164
3.2 The EU Legislation 166
3.3 Directive 2006/123 EC Not to Apply 166
3.4 Directive 2000/31 EC on E-Commerce 167
3.5 When Does Directive 2011/83 EU Apply? 168
3.6 Scope of Directive 2002/65 EC 169
3.7 Full Harmonization 170
3.8 Consumer Rights 171
3.8.1 Information Right 171
3.8.2 Right to Receive Contract Terms and Precontractual Information in Durable Form 172
3.8.3 Withdrawal (Cancelation) Right 172
3.9 Directive 2011/83 EU and 2002/65 EC Compared 173
4 Conclusion 174
References 175
Books 175
Journals 175
Studies 175
Online Documents 176
Insurance Contracts Online and Consumer Protection Under the European and Greek Laws 177
1 Empirical Observations on the Sale of Insurance Products Online 178
2 Legislative Framework for the Insurance Contracts Online 181
3 The Term of the Insured Consumer, According to the Provisions of European and Greek Laws 182
4 Information Duties of the Policy Holder 183
5 Withdrawal Right of the Policy Holder 185
6 Consumer Protection in the Sector of the Insurance Online. Information and Unfair B2C Commercial Practices According to Late... 186
7 Final Remarks 190
Part III: Cyber Risks 191
Cyber Insurance: Underwriting, Scope of Cover, Benefits and Concerns 192
1 The Context 193
2 Demand Side Triggers 194
2.1 High Publicity, Reputational Risk and Remediation Costs 194
2.2 Cyber Threats Targets and In-House Expertise 195
2.3 Data Privacy Regulatory Developments 196
2.4 Other Regulatory Action and Initiatives 198
3 Supply Side Response 199
3.1 The Challenges to the Development of the Cyber Insurance Market 199
3.2 Traditional Insurance Policies Against New Risks and Client Needs 201
3.3 Towards a More Comprehensive Risk Management Tool 202
4 The Specialist Product 203
4.1 Data Protection Breaches and Third Party Liability 203
4.2 Network Damage 204
4.3 Business Interruption from Network Failure/Shut Down 204
4.4 Cyber Extortion 205
4.5 Reputational Risk and Event Management 205
5 Conclusion 206
References 206
The Cyber Insurance in Japan 208
1 Introduction 209
2 The Recent Occurrences in Japan 211
3 The Cyber Insurance in Japan 213
3.1 The Definition: What Is Cyber Insurance in Japan? 213
3.2 Liability Insurance and General Property Insurance in Japan 215
3.2.1 Liability Insurance for Business Enterprises 215
3.2.2 General Property Insurance for Business Enterprises 218
3.3 The Nature of the Cyber Insurance 219
3.4 The Structure and Contents 220
3.4.1 The Cyber Insurance as Liability Insurance 220
3.4.2 The Cyber Insurance as Property Insurance 220
4 The Legal Issues on Cyber Insurance 221
4.1 The Cyber Insurance as Liability Insurance: General Liability Insurance and Special Policy for Leaking Personal Information 221
4.1.1 Who Is the Policyholder? 221
4.1.2 Who Is Covered by Cyber Insurance? 221
4.1.3 What Is Covered Information? 222
4.1.4 What Is ``The Accident´´? 222
4.1.5 The Limited Compensation 222
4.1.6 The Exclusion Clauses 223
4.2 The Cyber Insurance as Property Insurance: The Computer Comprehensive Insurance 224
4.2.1 Who Is the Policyholder? 224
4.2.2 What Risk Is Covered by the Cyber Insurance? 224
4.2.3 What Is ``The Accident´´? 224
4.2.4 Can ``Damages´´ Be Calculated? 225
4.2.5 The Exclusion Clauses 225
4.2.6 The Subrogation Clauses 226
5 The Conclusion 228
References 229
Data Protection in the Insurance Sector Under EU Law 231
1 An Overview of EU Law on Data Protection 232
1.1 The European Commission´s Proposal for a Data Protection Reform 234
2 ``Local´´ Policies, ``Master/Euro´´ Policies, ``Global/Multinational´´ Policies: The Initial Collection of Data Referring to... 236
3 The Claims Handling Process 238
3.1 Dispatching the Loss Report: Is the Broker a Data Controller or a Data Processor? 239
3.2 Receiving the Loss Report: Data Protection Issues Concerning Third Parties 239
3.2.1 The Information 240
3.2.2 The Consent of the Data Subject 240
3.2.3 ``Sensitive´´ Data 241
3.3 Disclosing Data to Other Offices of the Insurance Company and/or to Co-Insurers 241
3.4 Data Inputting in the Insurance Company´s Information System 242
3.4.1 Accessible to All Branches of the Insurer in the World? 242
3.5 Appointing of Adjuster(s) or Medical Experts 242
3.6 The Assessment of the Loss and the Right of the Data Subject to Access Documents and Evaluations of the Claims Handling Pr... 243
4 Final Remarks 243
Reference 244
Requirements for Privacy and Protection of Consumer Information in the U.S.: Implications for the Insurance Industry 245
1 Introduction to the U.S. Legal and Regulatory Regime for Protecting Consumer Information and Privacy and Its Implications fo... 246
2 Types of Consumer Information Subject to Protection in the U.S. 249
2.1 Financial Information 249
2.2 Identification and Credentials 253
2.3 Health and Medical Information 255
2.4 Employment Information 256
2.5 Educational Records 257
3 Types of Activities Subject to Privacy Protections 258
3.1 Online Behavior Generally 258
3.2 Children´s Online Behavior 260
3.3 Marketing Contacts 260
3.4 Video Viewing History 261
3.5 Background Checking and Other Employment Issues 261
4 Prevention of Identity Theft and the ``Red Flags´´ Rule 262
5 SEC Disclosures and Reporting 263
6 Record Retention and Disposal 263
7 Data Breach Notification Requirements 264
8 Insurance of Privacy and Data Protection Risks 266
Reference 269
Part IV: Dispute Settlement and Litigation 270
Online Dispute Resolution and Insurance 271
1 ODR and Insurance 272
2 Introduction and History of ODR 272
3 What is ODR? 274
3.1 The Notion of ODR 274
3.2 Technology: The ``Fourth Party´´ to the Dispute 274
3.3 ODR Characteristics 275
4 Insurance and Online Settlement 277
4.1 ODR and Insurance 277
4.2 Fully Automated Systems 277
4.3 Systems with Human Interaction 279
4.4 Mediation, Med-Arb, Arbitration 281
5 ODR Penetration in Europe 282
5.1 FIN-NET 283
5.2 The Consumer ADR/ODR Package 285
5.3 The Directive on Consumer ADR 286
5.4 The Regulation on Consumer ODR 289
5.5 Prospects of the Scheme with Regard to Insurance 291
6 Justice Requirements 294
7 The Example of Benoam 296
8 Summary and Conclusions 298
References 299
Private International Law and On-Line Insurance Contracts 303
1 Introduction: General Remarks 304
2 Online Insurance Contracts in International Legal Perspective 306
2.1 Online Contracts: Notion and Specifics 307
2.1.1 Outline 307
2.1.2 The European Union 310
2.1.3 North America 314
2.1.4 Asia 315
2.1.5 Arabic Countries 316
2.1.6 International Works on E-Commerce Law 316
2.1.7 Conclusions 318
2.2 Notion and Specifics of Online Insurance 319
2.2.1 Outline 319
2.2.2 Forming Online Insurance 319
2.2.3 Performing Insurance Contract Online 320
2.2.4 Insurance as ``Information Product´´ 321
2.2.5 Insurance as an Electronic Financial Service 321
2.2.6 Conclusions 323
2.3 Cross-Border Online Insurance 323
2.3.1 Outline 323
2.3.2 Universality of Insurance versus Regulatory Impediments 324
2.3.3 ``Cross-Border´´ Notion 325
2.3.4 Cross-Border Electronic Finance 326
2.3.5 Conclusions 327
3 International Private Law Rules for Online Insurance Contracts 328
3.1 Private International Law and Online Contracts 329
3.1.1 Outline: Notion of ``PIL´´ 329
3.1.2 ``Extraterritoriality´´ of Online Contracts 331
3.1.3 Lex Electronica 333
3.1.4 PIL in Electronic Finance 335
3.1.5 Conclusions 336
3.2 Role and Character of PIL Rules in Insurance 337
3.2.1 Outline 337
3.2.2 Protective Insurance Law and PIL 337
3.2.3 Conclusions 339
3.3 Autonomy of Parties´ Will in PIL Insurance Rules 340
3.3.1 Outline 340
3.3.2 Parties´ Disparity and Autonomy of Will 341
3.3.3 Conclusions 342
3.4 Connecting Factors (Contacts) in Online Insurance Contracts 342
3.4.1 Outline 342
3.4.2 Concept of Connecting Factors 343
3.4.3 Connecting Factors in Online Contracts 344
3.4.4 Connecting Factors in Insurance 346
3.4.5 Conclusions 349
4 PIL versus Integration of the Substantive Laws 350
4.1 Outline 350
4.2 Divergence of Contract Law 350
4.3 PIL as Integration Tool 351
4.4 Integration of Substantive Rules 352
4.4.1 Europe 352
4.4.2 Outside Europe: Note 356
5 Conclusions 356
6 Final Remarks: The Modern Role of PIL in Online Insurance Contracts 356
References 359
Cases 363
European Private Law (Regulation Rome I) and On-Line Insurance Contracts 364
1 Introduction 365
2 Legislative Background of Rome I 369
2.1 Unification of Laws 369
2.2 Protection of a Weaker Party to the Contractual Relationship 371
3 Applicability of the Rome I Regulation to On-Line Insurance Contracts 372
3.1 Relation to Provisions Regulating the Insurance Contract 372
3.2 Relation to the Provisions Regulating Sale at a Distance and Contracts Concluded by Way of Electronic Means 375
4 Factors Determining the Applicable Law for On-Line Insurance Contracts 376
4.1 Types of Contracts 377
4.1.1 Large Risks 378
4.1.2 Mass Risks Within the EU 379
4.1.3 Life Insurance 380
4.1.4 Reinsurance 381
4.1.5 Compulsory Insurance 383
4.1.6 Contracts with Policyholders That Are Considered Consumers Under National Legislation 384
4.2 Location of a Risk 385
5 Experience of Non-EU Member States 388
6 Conclusions 389
References 391
Erratum to: The ``Dematerialized´´ Insurance 395
Index 396