In order to prevent misselling of insurance policies through distance marketing and to protect consumer interest, the Insurance Regulatory and Development Authority (IRDA) brought into effect from October 1 this year its guidelines on distance marketing of insurance products.
The guidelines, which apply to every activity of solicitation and sale of insurance products through the internet, e-mail, snail mail, newspaper inserts, SMS and telephone, mandate that every insurer prepare a standardised script for the purpose and file this with the regulator.
The script has to incorporate all key features of the product, including the benefits, features and disclosures, and all solicitations and sale activities should strictly be in line with the script.
Every conversation over telephone with the customer has to be recorded and in case of a dispute, insurers cannot wriggle out of false promises made to customers over phone.
The guidelines also provide for a voice copy to be given to the consumer, if he/she so desires, at any time during the term of the policy or until a satisfactory settlement of claim, whichever is later.
Then there are specific regulations such as IRDA (Protection of Policy Holders' Interests) Regulations 2002, which make it mandatory for insurers and their intermediaries to be honest, transparent and make full disclosures about the policy at the time of sale.
"A breach of the obligations cast on an insurer, or insurance agent or insurance intermediary in terms of these regulations may enable the authority to initiate action against each or all of them, jointly or severally under the Act and /or the IRDA Act, 1999," says the regulation.
Similarly, the code of conduct for agents under the IRDA (licensing of insurance agents) Regulations stipulates that they go strictly by the rule book, play fair and not offer different rates, advantages, terms and conditions other than those offered by the insurer.
Yet, you find consumers, particularly senior citizens, becoming targets of fraud and misselling in the insurance industry.
Prasanta Kumar Sen: An agent of an insurance company contacted me on phone and offered a policy which he said was meant for senior citizens. Later, he himself came to my place and filled the form. He asked for photos and I had a joint photo with my wife and I asked him to prepare a joint policy for us. I named my daughter as the nominee and he insisted that we give her picture too. Since she is not in India and I didn't have her latest picture, I gave an old one and he accepted it. I gave a cheque for R25,000 towards the first installment.
Some months later, when I received the policy document, I was shocked to find that the policy has been issued in my daughter's name by copying her signature which was on the back of her photograph. I complained to the COO of the insurance company and he replied that the complaint must be made by the policy holder only. What do I do?
Answer: This is a very serious case of fraud by the agent and instead of taking action against him and redressing your complaint; the insurance company is trying to abdicate its responsibility. This is truly reprehensible!
Please send your complaint immediately to the IRDA, giving all details. Also mention that you have already complained to the insurer (give details), as it is a pre-requisite for registering your grievance with the regulator.
To complain online, please go to the IRDA website (irda.gov.in). On the right hand side, you will see a link for 'online registration of policyholder complaints'. Click on that and it will take you to "IGMS" or the Integrated Grievance Management System', through which you can register your complaint.