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Insurance IRDAI urges insurers to come out with simple products

IRDAI urges insurers to come out with simple products

IRDAI Chairman, Dr. Subhash Khuntia said that insurance companies should launch products that could be sold like bank FDs.
Nishant Patnaik Sep 11, 2018

The new IRDAI Chairman, Dr. Subhash C Khuntia has urged insurance companies to come out with simple products with pre-defined features that people can understand easily. He was speaking at the 20th CII Insurance and Pensions Summit held today in Mumbai.

Dr. Khuntia said that these standardized products should have predefined features like bank FDs. Insurers can introduce advanced features through add-ons later. He said, “Sell products that are standardized in design so that people are not misled. There are lot of complaints about insurance products being misleading. When you open a bank fixed deposit account,  you have no problem in understandibg the terms and conditions because all banks have similar terms and conditions. Similarly, can we come out with simple insurance products like third party insurance so every one knows what it involves.”

Highlighting the need to expedite claim settlement process and grievance redressal mechanism in the insurance industry, Dr. Khuntia said that the insurance companies should review if their policyholders are satisfied with their services. He further said that it is the responsibly of insurers to ensure that their distributors sell products which would benefit policyholders. There are lots of complains about mis-selling and repudiation of genuine claims. The industry need to build trust among customers, he added.

He said, “In my view, claim settlement process should be quick and painless. Insurance companies should avoid repudiating claims by carefully underwriting risks. In addition, insurance companies should encourage policyholders to reduce risk. For example, some health insurance are giving discount on renewal premium if a policyholder is walking 10,000 steps a day. Such initiatives are win-win for all.”

He further suggested that IRDAI would make a framework for regulatory sandbox in Indian market conditions to facilitate adoption of fintech and promote financial innovations in the insurance industry.

Talking about the industry growth, he said that he expects industry to grow at a CAGR of 20% over the next five years.

 

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7 Comments
Desmond Mascarenhas · 4 months ago
IRDA chairman is well aware of the fact that insurance is an expense and not an income. IRDA Chairman is also aware that GST on Term Insurance is 18%, whereas for other traditional insurance products is 4.5%. Isn't this misleading.
C Y Sulfi · 4 months ago
INSURANCE is one of the purposeful financial products if chosen properly according to the need and everyone have to be insured... Executive Life Planner with TATA AIA
sanjay mishra · 4 months ago
insurance is good but why IRDA not opening doors for IFA to sell all insurance company's products under his IRDA Code.
Mangesh · 4 months ago
Yes, exactly.instead they are permitting banks to sell insurance, which they are literally mis selling. IRDA has become Dhrutarashtra, wearing Patti on their eyes. Sab kuch malum hote huie bhi Anjaan ban ye hai..
Manoj Mohanty · 4 months ago
Well said brother.
Reply
MANOj MOHANTY · 4 months ago
If IRDAI chairman wants to develop the quality of insurance selling , than it will be the first step to be taken that IRDAI should take care not only customers but also the employees and the insurance advisors of the all companies.IRDAI should implement some guidelines for instance companies regarding this also.
ASHOKKUMAR N RATHOD · 4 months ago
IRDAI SHOULD ALLOW IFA TO SELL INSURANCE POLICY OF ALL COMPANIES.
BECAUSE WHEN WE REACH ANY CUSTOMER HE DEMANDS FOR ANOTHER COMPNY INSTED OF WE HOLD LICENCE OF PARTICULAR CO.
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