The Financial Services and Markets Authority (FSMA) imposes (via a Regulation) restrictive conditions on the commercialisation, vis-à-vis consumers, of certain insurance contracts on multimedia devices.
This Regulation was issued after a seller of multimedia devices offered its consumers a supposedly free insurance policy when purchasing a multimedia device. To do so, the consumer had to provide his account number (under the guise of a cashback offer) and sign documents. It turned out, however, that the consumer had subscribed to a long-term insurance policy that became payable after the free period and whose cost amounted to EUR 200 per month. The FSMA investigated the complaints it received, whereupon the FSMA banned the retailer from selling insurance products.
In order to avoid such practices in the future, the Regulation prohibits "the marketing to consumers in Belgium of multimedia insurance policies or to propose to them the subscription of such multimedia insurance policies, of which the premium is paid in instalments and is not, in a manner established at the outset by agreement, divided into equal parts, and of which the payment is regularly spread over the entire term of the contract”.
More specifically, the Regulation refers to insurance contracts that provide for full or partial coverage for (i) damage, (ii) malfunction, (iii) loss, (iv) theft or (v) fraudulent use, regardless of the cause, of a multimedia device. Multimedia devices are to be understood as "all devices that provide access to the Internet, and/or that allow images to be projected, and/or that allow sound to be distributed, as well as their accessories" such as phones, smartphones, computers, game consoles, tablets, e-readers, televisions, cameras, printers and smartwatches.
The above types of insurance can still be offered with the purchase of a multimedia device, provided that consumers are adequately informed prior to the conclusion of the contract about the main features of the insurance, such as the amount of the premium and when it must be paid. Moreover, periodic premiums must now be of the same amount and spread equally over the term of the contract.
It is no longer possible for consumers to be offered insurance where the first few months are exempt from paying a premium, but then face rising premiums.
The Regulation went into effect on 13 November 2022.
Benoît Vandervelde
Partner, Brussels
Anaïs Casteur
Associate, Brussels
Florence Berchem
Associate, Brussels
