Very soon, IRDAI may ask insurance intermediaries like agents and brokers and insurance companies not to claim ranking and awards received in lieu of criteria like premium income, no. of policies sold or claim settlements.
In draft regulations, IRDAI has proposed that insurance agents and intermediaries should not promote their business by using awards and recognition given to them for meeting sales targets like Million Dollar Round Table (MDRT).
However, IRDAI may allow insurers and intermediaries to promote awards and recognition given by independent agencies, which do not have direct interests in insurance business. However, insurers and intermediaries cannot pay or procure any service from these independent agencies to get a rating or award. Source and credibility has to be disclosed in legible fonts if they use such an award/recognition in advertisements.
Further, IRDAI may ask intermediaries to take written approval from insurance companies before advertising their products and services. However, agents may not require such an approval if advertisements is developed by insurance companies. Also, agents are allowed to advertise their name, logo, address and phone number.
In addition, agents may have to give disclosure statements outlining policies offered and privacy of personal information on their website. Also, agents may have to disclose their agency license number prominently on their website.
Here are other key draft guidelines for insurers and intermediaries:
Advertisement will be considered unfair or misleading if it
- Fails to identify the product as insurance
- Makes claims beyond the ability of the policy
- Describes benefits that do not match the policy
- Uses words that minimizes the risk inherent in the policy
- Omits to disclose insufficiently, important exclusions and limitations
- Gives information in a misleading way
- Illustrates future benefits based on unrealistic assumptions
- Makes unfair comparisons
- Uses design and content that diminish significance of any statement
Advertisement is not misleading if it
- Communicates clearly and fairly
- Uses material and design to present the information legibly
- Uses comprehensive sales and advertisement materials
- Carries mandatory disclosures
- Prominently discloses insurance coverage
IRDAI may also ask insurers and intermediaries to carry this statement along with all advertisements, “No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectus or tables of the insurer.”
You can share your feedback on these proposals to IRDAI by sending email at es.gopalkumar@irdai.gov.in with a copy to life@irdai.gov.in by November 10, 2020.
