Mention must be made of what is perhaps the most important step that the Authority has taken keeping in view the interests of policyholders

15 Jun 2010

STEPS TAKEN BY IRDA TO PROTECT POLICYHOLDERS` INTERESTS

The most important step that the Authority has taken keeping in view the interests of policyholders. IRDA set up an exclusive Consumer Affairs Department that focuses on consumer related issues and initiatives including grievance redressal and consumer education through Insurance Awareness Campaigns. With a view to creating a central repository of industry-wide insurance grievance data and facilitating monitoring of disposal of grievances by insurers, IRDA is on the verge of implementing the Integrated Grievance Management System (IGMS).

IGMS will not only help monitor the redress systems of insurers but also create a gateway for policyholders to register complaints with insurance companies first and if need be escalate them to the IRDA Grievance Cells.

The Consumer Affairs department goes beyond facilitation and works towards taking grievances to their logical end by calling for explanations where required, carrying out enquiries and inspections etc. It is proposed to make the institution of the Insurance Ombudsman handle all types of complaints including those relating to policy sale and servicing rather than just restricting it to claims. IRDA is also shortly making its Call Centre operational for policyholders to lodge their grievances and also seek their status over phone/e-mail.

Distribution channel related changes:

1. IRDA has amended the IRDA (Insurance Advertisements and Disclosure) Regulations to remove any scope for the involvement of unlicensed personnel/entities in the sale of insurance products.

2. IRDA has amended the IRDA ( Licensing of Corporate Agents) Regulations to further tighten the Code of Conduct of corporate agents to ensure that the prospect does not deal with any unlicensed person. The Regulations have also been amended to ensure that there is no scope for any kind of remuneration other than commission where sale has been effected. This measure will reduce the expenses of the insurer, thereby lowering premiums to be paid by the policyholder.

3. Regulations for referrals: IRDA has also addressed the issue of Referrals by bringing out separate Regulations leaving no scope for misuse of the system. Companies which wish to share their database of customers with insurers would need to get approval from IRDA after having conformed to the requirements as laid down in the Regulations.