Aimed at protecting the interests of policyholders, India’s insurance sector watchdog IRDAI has formulated detailed advertising guidelines for insurance companies.
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According to IRDAI, all advertisements for participating insurance products must disclose the following risk factors:– The projected bonus under the product is not guaranteed.
The circular also states, “All insurers shall advertise the launch of unit-linked funds or index-linked funds under existing insurance products or new insurance products, only with reference to the underlying life insurance coverage and the products associated with it.”This ensures transparency and helps customers understand the risks and dependencies associated with these insurance products.
The circular mandates a tech-based grievance redressal system ensuring swift and efficient resolutions, aiming towards zero grievances,” Jain said.
Aimed at protecting the interests of policyholders, India’s insurance sector watchdog IRDAI has formulated detailed advertising guidelines for insurance companies. The regulator has asked insurers to ensure that the advertisements are true and not misleading.
The regulator has said that advertisements for unit-linked insurance products, index-linked products, and annuity products with variable annuity payout options must contain adequate, accurate, explicit, and updated information, presented in simple language. This information should include, but is not limited to, the following:
– A factual depiction of the inherent risks involved.
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– Risk factors with specific references to fluctuations in investment returns.
– Charges related to the fund or premium paid, and the possibility of an increase in these charges.
– Information on the contingency on which any guarantee is payable and the exact quantum of such guarantee.
According to IRDAI, all advertisements for participating insurance products must disclose the following risk factors:
– The projected bonus under the product is not guaranteed.
– Past performance does not indicate future bonuses.
– These products are subject to the insurer’s overall performance in terms of investments, management of expenses, mortality, and lapses.
The circular also states, “All insurers shall advertise the launch of unit-linked funds or index-linked funds under existing insurance products or new insurance products, only with reference to the underlying life insurance coverage and the products associated with it.”
This ensures transparency and helps customers understand the risks and dependencies associated with these insurance products.
Effective and robust grievance redressal system
The Insurance Regulatory and Development Authority of India (IRDAI) has instructed insurers, through a circular issued on June 19, to implement an effective and robust grievance redressal system. This system should include provisions for the online submission of grievances and arrangements for registering all grievances submitted to the insurer in various forms, such as through the insurer’s call center, if deployed.
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Additionally, insurers should have other arrangements for redressal, like internal ombudsman schemes. IRDAI has also emphasized that insurers need to publicize these arrangements widely. This initiative aims to ensure that customers and policyholders have better clarity regarding grievance redressal measures.
“IRDAI has emphasised the importance of governance aspects for insurers. Bringing in the importance of compliance and guidance in insurance product promotions and advertisements with the committee formation will require advertising to be rigorously reminded to maintain transparency and truthfulness to benefit the policyholder’s interest,” said Rakesh Jain, CEO, Reliance General Insurance.
Also, a key feature in the circular is that grievance redressal systems will be implemented so that customers can share their experiences on how their concerns are being addressed, Jain pointed out.
All grievances should be resolved within specific timelines
According to IRDAI, every insurer must ensure that all grievances are resolved within specific timelines. A written acknowledgment of a grievance must be provided to the complainant immediately. If further details are needed from the complainant, insurers are permitted to seek this information only once, and it must be done within one week. The resolution of the grievance and issuance of the final resolution letter should occur within two weeks. If the grievance is closed due to non-receipt of a reply from the complainant, this should be completed within eight weeks.
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Tech-based grievance redressal system
“The timelines the regulator has implemented to address these concerns are noteworthy, as they have ensured a designated officer (Ombudsman Scheme) to address these matters. Based on the activity, the addressal timeline will vary depending on the method of addressal. The circular mandates a tech-based grievance redressal system ensuring swift and efficient resolutions, aiming towards zero grievances,” Jain said.
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On IRDAI measures, Nitin Deo, CTO, Zuno General Insurance, said, “The recent insurance reforms are a significant step towards empowering the policyholder. By implementing a tech-driven grievance redressal system, ensuring transparency in advertisements, and adopting a ‘phygital’ (physical and digital approach) approach to reach remote areas, these reforms aim to create a more accessible and trustworthy insurance landscape.”
Additionally, provisions for uninterrupted policy servicing and streamlined group insurance further enhance policyholder’s confidence and satisfaction, Deo said adding that the measures are designed to provide efficient, economical, and high-value services, reinforcing the commitment to policyholder empowerment.
