The IRDAI has asked insurance companies to form an advertisement committee, approved by the board of directors, and appoint a senior-level officer of the distribution channel to examine and approve advertisements. This is to ensure that the advertisements are true and not misleading.
This is one of the several requirements spelt out by the IRDAI as it strengthens governance measures in the operations of insurers in a new document titled “Master Circular on Operations and Allied Matters of Insurers”, released on 19 June. The new umbrella directive repeals 11 previous circulars.
In a statement, the IRDAI says that the key aspects of the Master Circular are:
Insurers to have a tech-based robust mechanism for grievance redressal of policyholders for an efficient and speedy resolution, while also striving to move towards “zero grievances”.
Insurers are required to establish regular customer interface through customer-friendly processes, run awareness campaigns, facilitate submission of grievances online and ensure registration of all grievances, straighten the resolution process with an internal escalation matrix (if not satisfied with resolution at the first level), and Internal Ombudsman Schemes.
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 this must be carried out 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.
Apart from forming an advertisement committee, the Master Circular covers other advertising-related issues. One matter is that 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.”
To make insurance accessible in remote locations of the country, insurers are required to adopt a phygital approach (both physical and digital) to open places of business.
Insurers are to outsource permitted activities only if they are economical and efficient in providing services to the customers and/or they enhance the value of their business. Outsourcing activities shall be under the oversight of a committee constituted by their board.
Policyholders are to get an option to avail of online services or be assigned another insurance agent/ sales staff for uninterrupted policy servicing even if and when an insurance intermediary is no longer associated with the insurer.
Insurers have to make provisions to streamline group insurance business:
a. Insurers to issue a “Certificate of Insurance’ to all the members of a non-employer-employee group scheme
b.Consent of nominee/ policyholder/ beneficiary is necessary for repayment of the outstanding loan amount from the proceeds of an assigned policyholder
c. In the case of group mediclaim policies, no claim shall be denied for non-availability of details of members of the group.
Policyholders can access information on unclaimed amounts with any insurers in one place.
The IRDAI vows,” Relentless efforts to achieve the mission of protection of policyholders’ interests; securing a fair treatment to them; promoting transparency and orderly conduct of insurance business will continue with an ultimate objective of empowering the policyholder."