The Association of Professional Financial Planners (Luasa) recently welcomed an announcement by the Life Offices' Association (LOA) that a Jargon Buster had been completed and published for industry comment. The Jargon Buster provides an interactive list of commonly used life insurance concepts and medical conditions to assist financial intermediaries and consumers in better understanding the terms used in policy wordings.
The jargon buster is not a dictionary but rather a central repository that aims to provide a consistent reference resource for the industry. The knowledgebase has been designed to accommodate additional input and corrections from readers. Those who believe a particular definition or term is incomplete or incorrect can provide relevant feedback which will be considered by a panel of experts before being included in the reference or discarded.
At present, the list is divided into sections for insurance concepts and medical conditions. The insurance section "aims to explain the terminology most commonly used by life insurance companies in their product brochures, application forms, quotations and contracts." The medical section provides definitions of various illnesses and conditions which may be included in dread disease and disability policies.
Product complexity causing confusion
Raymond Byrne, CEO of Luasa, believes that the jargon buster is partly the result of requests made to the LOA some three years ago. Financial intermediaries were finding it increasingly difficult to make meaningful comparisons between life insurance products offered by different providers. They were also bearing the brunt of consumer dissatisfaction with refuted claims.
"While the substantial variance in product offerings may have helped insurers differentiate their products from competitors, it has caused confusion and in many cases, mistrust among consumers especially when claims have not been honoured due to complicated, misunderstood conditions. The latter also led some consumers, who were justifiably angry and disillusioned, to apportion responsibility on the intermediary who sold the product. In worst case scenarios, consumers reported the intermediary to the FAIS Ombudsman, thereby placing the intermediary's livelihood and reputation at risk," said Byrne.
In a press release announcing the jargon buster, the LOA was quick to acknowledge the situation. Their jargon buster was created in response to the "unnecessary complexities that have been created through the use of inconsistent terminology and definitions in marketing material, policy documents and client communication."
CEO of The LOA, Gerhard Joubert explains: "For this reason the LOA appointed a jargon busting committee consisting of representatives from the life industry's medical insurance professionals, which was given the mammoth task of explaining the most commonly and important product and medical terms used by the life insurance industry."
No such thing as a simple definition
We spent some time browsing the terms and concepts presented in the jargon buster. If you were expecting to find short and concise definitions you will be disappointed. Each term or concept is accompanied by detailed explanations, often running into two pages.
Over time the jargon buster will be tested on three fronts. The first test is whether or not the list of terminology included in the list is exhaustive. Those responsible for maintaining the list will have to ensure that all terms which might give rise to a policy wording dispute are ultimately included in the reference.
The second test is whether or not the definitions and explanations included in the list are accepted by all the insurance companies concerned. Will these insurance companies accept the definition included in the reference when the wordings in their policies come into dispute?
And the final test relates to the clarity and simplicity of the explanations included in the jargon buster. If the jargon buster causes further confusion or debate as to the meaning of a particular term then it will have failed in its purpose.
These are three extremely difficult hurdles to clear. However, if the jargon buster can achieve these goals it will certainly be welcomed by financial intermediaries and consumers alike.
A work in progress
The LOA jargon buster is a work in progress. Participants in the industry will be able to make recommendations for additional terms to be included and will be able to offer corrections and changes to existing definitions. "To ensure the ongoing relevance of the jargon buster, we developed a web based reference tool using wiki technology," said Joubert. For those readers who do not already know, Wikipedia (www.wikipedia.com) is an online reference tool maintained and updated by the online community.
Joubert was quick to point out that the integrity of the resource would be protected. "To make sure that all edits and submissions are relevant and factually correct, a panel of experts will regularly review submissions." This dynamic environment should ensure that the 19 insurance concepts and 29 medical conditions currently included in the list expand significantly in time to come.
The jargon buster can be viewed at www.loa.co.za. The LOA welcomes any feedback and suggestions from intermediaries, consumers and representatives of the media. We strongly urge all of our readers to take a look at the jargon buster and submit feedback to the LOA to aid them in developing this resource.
Editor's thoughts:
We have taken a brief tour of the jargon buster on the LOA website. The concept and execution are solid and create a professional reference foundation. The real test will be in determining its usefulness to the financial intermediary and other stakeholders in the insurance industry. Do you believe the LOA jargon buster is what the industry needs? Does it include a meaningful and useful mix of insurance concepts? Spend a few minutes browsing the LOA website and let us know what you think. Send your comments to gareth@fanews.co.za
Get the latest issue of FAnews