Sale of insurance policies will soon be based on a scientific needs analysis from the customer's point of view.
The needs analysis, a document to be prepared by an agent or a broker, will capture all the vital information pertaining to a prospective buyer of insurance policy in a tabular form.
This information would be used by the agent to identify and recommend a suitable policy to the buyer.
The Insurance Regulatory and Development Authority (IRDA) is planning to amend its regulations for the protection of policy-holders' interests to make it mandatory for an agent/broker to prepare a needs analysis document.
The proposed provisions to be included would prescribe the factors to be taken into account for preparing the document such as needs prospects, employment and financial information, identified insurance needs of the person, the recommendations of the agent/broker, among others.
Though the need for a needs analysis is already there in the regulation in some manner, “IRDA should require insurers to establish a system to supervise the recommendations made to the customer by the intermediaries so that the insurance needs and financial objectives of the customers are adequately addressed,'' Mr A Giridhar, Executive Director, IRDA said in an exposure draft on modifications to Regulations for Protection of Policyholders Interests, 2002, hosted on its portal.
The needs analysis was required as the consumers generally would not have enough information to determine whether the product recommended to them was the ideal one, Mr Giridhar said.
The insurers, intermediaries, consumer bodies and general public can send their feed back on the issue to IRDA by July 5.
