Why is “market conduct” significant in the insurance industry?

The significance of "market conduct" in the insurance industry lies in its role in ensuring fair treatment of consumers by insurance companies and agents. Market conduct refers to the actions and behavior of insurers and agents in their dealings with policyholders and the general public.

When market conduct is regulated, it helps uphold consumer rights, ensuring that they are treated honestly and ethically. This includes preventing deceptive practices, ensuring transparency in policy terms, and promoting fair pricing. Regulators monitor market conduct to protect consumers from unfair practices that could harm them, foster trust in the insurance system, and enhance overall market stability and integrity.

While aspects such as profit regulation, marketing strategies, and claims definitions are important in the broader context of insurance operations, they do not directly address the fundamental consumer protection goals that market conduct regulations aim to achieve. Thus, the focus on consumer treatment is what makes this concept particularly significant in the industry.