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Insurance IRDAI tightens advertisement norms for insurers

IRDAI tightens advertisement norms for insurers

The insurance regulator has directed life insurance companies to segregate death claim settlement ratios of individual and group policies.
Team Cafemutual Sep 20, 2017

IRDAI has tightened advertisement norms for the Rs.30 lakh crore life insurance industry.

In its latest circular, IRDAI has directed life insurance companies not to club claim settlement ratios of individual policies and group policies in advertisements.

The insurance regulator has asked life insurers to segregate claim settlement ratios of individual and group policies before publishing or broadcasting the advertisements. This will give clear picture to policyholders and bring uniformity in the industry.

Sharing the rationale behind this move, IRDAI said, “It has been observed that insurers are following different methods to arrive at death claims paid data while publishing them in ‘Insurance Advertisements’. In order to have uniformity across the industry, instructions are hereby given to life insurers to use/publish only ‘annual figures’ of death claims paid ratios.”

Typically, claim settlement ratios of group policies are better than individual policies due to economy of scale. A few insurance companies club claim settlement ratio of group policies with individual policies to advertise attractive claim settlement ratios.

IRDAI further said, “The insurance advertisements for group products shall only reflect group death claims paid ratio and individual products shall only reflect individual death claims ratio.”

In addition, life insurers will have to use death claim settlement ratios of individual policies if they do branding activities through advertisements. 

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