IRDA has deferred the compliance date for the implementation of standard proposal form for life insurance policies from October 15, 2013 to April 1, 2014. The reason behind this delay is still not clear. Through a press note, the regulatory authority stated that it had received representations from various life insurance companies.
However, industry experts suggest that some insurance companies requested IRDA to simplify standard proposal form. They are also seeking some time to train insurance agents on the new guidelines. However, according to industry sources, IRDA has not responded to their requests so far.
Earlier, IRDA introduced a standard proposal form which aims to bring transparency in sales process in order to curb mis-selling in life insurance products. The 12-page form comprises four sections: A) details of prospect; B) specialized/additional information; C) suitability analysis; and D) recommendations. It will be mandatory for all life insurance companies, agents, insurance brokers and banks to fill the standard proposal form as and when it is implemented.
GN Agarwal, CEO, Future Generali Life Insurance, says, “The industry is not yet ready to comply with the standard proposal form since insurance companies are undergoing product approval process till October.”
Prakash
Praharaj of Max Secure Financial Planners doubts whether IRDA would simplify
the standard proposal form. He says that many insurance companies and advisers
wrote to IRDA requesting the simplification though it proved to be a futile
exercise.