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Information Note
April 3, 2023

Circular No. 3/2023, of March 29

Recommendations on information to be provided by insurers

changes in insurance premiums

The Insurance and Pension Funds Supervisory Authority (ASF) has as its primary mission

ensure the regular functioning of the insurance market and pension funds in Portugal,

in order to ensure the protection of policyholders, policyholders, underwriters,

participants, beneficiaries and injured third parties.

Within the scope of the powers assigned to it, the ASF received several complaints, in terms of

within the scope of various policies and lines of insurance, in which the provision of information regarding the

alteration of the contractual conditions is not appropriate, namely regarding the increase of the

insurance premium, a situation that sometimes arises from the application of updates or rules

defined in the contract that are also not adequately communicated or clarified to the

consumer at the time of conclusion of the contract.

Thus, considering your supervisory experience in the promotion of transparency

and the accuracy of the information provided to policyholders, the ASF issued Circular No. 3/2023,

of March 29, in which it discloses to the market a set of good practice recommendations

applicable to insurance premium payment notices and other aspects related to

possible contractual amendments.

The ASF understands that information on the values of variations in insurance premiums between

policy term periods is essential for consumers to be informed about

relevant aspects of contractual conditions and empowered to make informed decisions

and informed.

The recommendations now determined, which are summarized below, benefit the good

functioning of the market, namely protect the rights and interests of

consumers.

1. It is recommended that, on the anniversary or contract renewal date, insurers

include in the payment notices, in addition to the premium amount for the following annuity,
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Information Note
April 3, 2023

also the value of the previous annuity premium, or previous ones, so that it is possible for the

policyholder can make a comparison.

2. It is recommended that insurers prominently include in payment notices:

a) Indication of the impact, on the variation of the premium applicable to the contract, of the variation of the

loss ratio, the variation of the insured capital and the variation of the contracted coverages,

quantifying, in percentage, each of the factors separately;

b) Indication of the impact, on the variation of the premium applicable to the contract, of other factors

that are relevant, quantifying, in percentage, each of them separately;

c) Identification of other factors that may be relevant in the variation of the premium

applicable to the contract.

3. It is recommended that payment notices also include an indication that the

policyholder has the right to request information on the specific amount of the

remuneration that your insurance intermediary receives for providing the service of

distribution.

4. Whenever possible, automatic changes arising from the normal validity of the

contract must be reflected in the clauses, clearly indicating in the conditions

contractual terms if it is foreseen to change the premium throughout the contract and at what moments and

conditions this may occur, how the premium is calculated and the factors that may

cause an increase in the amount payable, such as a change in age group,

namely in health insurance, or the verification of a high loss ratio.

The ASF will create a specific report on this matter, through which it will closely monitor

continued implementation by insurers of the recommendations now issued, and

which can be consulted in more detail here.