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To prevent mis-selling, insurance regulator IRDA has made it mandatory for insurers to record as well as preserve all calls made by their corporate agents or brokers to prospective customers. The new guidelines will be effective from October 1 this year.
According to the guidelines, every insurer needs to prepare and file with IRDA a ‘standardised script’ for presentation of benefits, features and disclosures under each of the products proposed to be sold. This script must be approved by the regulator before it could be sold by any means of solicitation other than in person.
Significantly, the guidelines also put a ceiling on the sale of unit linked insurance plans through the telephonic mode. “Insurers shall not solicit ULIPs of non-single premium type for annualised premiums exceeding Rs 50,000, and Rs 1 lakh for single premium over telephonic mode. No variable insurance product shall be solicited or sold over distance marketing mode”, the guidelines said. The industry has, in the past, attracted maximum flak for selling ULIPs without adequately educating customers about the product.
The tele-caller now will need to disclose his or her name along with the available language options. They will have to inform the client that the call is being recorded and that the client is entitled to a voice copy at any time during the term of the policy or until a satisfactory settlement of the claim, whichever is later.
The guidelines categorically mention that the solicitation process should continue only after receiving the explicit consent of the client. Insurers will have to provide the disclosure of rates of commission available on the product solicited upon the request of the client. CEO, Policy Bazaar, an online insurance products’ aggregator, Yashish Dahiya said, “The guideline would bring increased accountability and transparency, and hence is a pro-customer move. Mis-selling should reduce with proper information delivered to the customer before actual purchase.”
The new guidelines are an attempt to plug the malpractice of selling insurance without undertaking a “need-based analysis”. “Solicitation shall be strictly on the basis of the analysis of the client’s needs as specified by IRDA from time to time,” the guidelines said.
Insurers also will need to make verification calls to monitor the quality of sales, to a minimum of 3 per cent of the policyholders who purchase insurance over distance marketing mode, every month.
Reacting on the new IRDA guidelines, Head, Marketing and Direct, ICICI Lombard general insurance, Kartik Jain, said, “ “In the developed markets, the distance marketing channel is quite robust so the move is in line with the international insurance practices. It will also help the customer in settling the dispute in a case of charges of mis-selling as the calls need to be recorded and preserved.”
In all instances where a policy is issued without obtaining a proposal in physical form, the insurers shall forward a verbal transcript of the voice/electronic record of the queries raised and answers thereto on the basis of which the policy has been underwritten, along with the policy bond, IRDA said.
Source :- The Financial Express |
