The Insurance Regulatory and Development Authority of India (IRDAI) is ramping up its scrutiny and regulatory measures concerning complex insurance products, with a specific focus on those tailored for individuals aged 55 and above.
This heightened attention reflects growing apprehensions surrounding deceptive sales practices prevalent within the insurance industry. In response to mounting concerns, the IRDAI is adopting a proactive stance to safeguard the interests of older consumers, ensuring transparency, fairness, and suitability in the sale of insurance products.
Accountability
IRDAI is engaging in dialogues with various stakeholders, including banks, to promote transparency in sales practices. Discussions are underway to introduce mandatory video verification processes before policy acceptance, aiming to ensure clarity and informed decision-making for customers.
Focus
The regulatory body is increasingly inclined towards the notion that intricate insurance products, especially those intricately tied to market dynamics and designed for older age groups, necessitate a more rigorous oversight. The focal point of this perspective revolves around bolstering transparency, particularly in serving clients with limited literacy levels.
This entails a comprehensive examination of the intricacies inherent in such products, ensuring that their features and risks are clearly elucidated to consumers. The aim is to empower individuals with the knowledge and understanding necessary to make informed decisions about their insurance choices, thus safeguarding their interests and promoting greater financial literacy within the populace.
Controls
To combat mis-selling through bancassurance channels, IRDAI is proposing stringent measures. Suggestions include refraining bancassurance partners from setting sales targets or offering incentives for policy sales. Additionally, regular audits are being proposed to uphold accountability and integrity.
Assessment Criteria
In a bid to standardize practices, IRDAI advocates for the adoption of assessment criteria developed by insurers and standardized templates in policy documents. These measures are intended to streamline processes and ensure consistency across the bancassurance landscape.
Collaboration
Government officials have been actively involved in addressing concerns surrounding bancassurance. Recent meetings between financial services authorities and bank leaders underscore the importance of collaboration in improving insurance penetration and mitigating challenges like mis-selling.
Effort
The IRDAI’s initiatives reflect a collective effort to fortify consumer protection measures and uphold ethical practices in the insurance sector. By fostering transparency, accountability, and collaboration among stakeholders, the aim is to enhance customer trust and confidence in insurance products.
