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Insurance Now, agents will require a certificate from policyholders

Now, agents will require a certificate from policyholders

Agents will need acknowledgement from policyholders that they have given all material information related to the recommended policy and the client has understood it.
Team Cafemutual Jul 13, 2017

Insurance intermediaries like agents, brokers and insurance marketing firms now need to put in more effort to improve the sales and servicing experience of their customers.

IRDAI’s latest circular on protection of policyholders mandates insurance agents and brokers to obtain a certificate from policyholders acknowledging that the salesperson has explained to them all the material information related to the policy and they have understood it.

In addition, IRDAI asked insurers to spread awareness on insurance products, benefits and their rights to educate prospects and policyholders.

The new guidelines have also provided clarification on the claim settlement procedure. IRDAI has mandated that they have to pay a fine of 2% above the bank rates. Currently, the bank rate is hovering around 6.5-7% per annum. Similarly, non-life insurers will also have to pay an interest rate of 2% above the bank rate if they delay settling claims in health insurance policies.

As of now, if an insurer made the payment after the due date, the company was liable to pay the interest only for the additional days after the due date. Now, if the insurer delays in making the claim payment, it would have to pay interest as penalty for the entire month. For instance, if the due date is April 30 and the claim is made on May 2 then the insurer will have to pay penalty for the entire month instead of just two days.

Also, every insurer shall display the service parameters and turnaround times approved by the regulator on its website and keep the same updated.

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