Mumbai: The guidelines cover activities of insurers/brokers and corporate agents at different stages of offer, negotiation as well as conclusion of sale. Distance marketing includes every activity of sale of insurance products through different modes such as voice, SMS, electronic mode, email, internet etc.
The regulator has asked the insurers not to pay any remuneration to the brokers other than brokerage. “No payments by any name shall be made by insurers to brokers or their related parties towards infrastructure or any account other than brokerage on the policies solicited or procured over distance mode.” said J. Hari Narayan, Chairman IRDA.
The guidelines require the insurers/brokers to prepare standardized scripts for each product that are sold through distance mode. The scripts are to include all the key features of the product and require approval by the compliance officers of the respective insurers.
IRDA prohibits selling of universal life products over telephone and also puts a limit on the premium for selling ULIPs. The regulator has asked the insurers not to sell ULIPs of non-single premium type for annualized premiums exceeding Rs. 50,000 over telephone. For single premium category selling ULIPs over telephone cannot exceed Rs. 1, 00,000 premiums.
Insurers are restricted from selling variable insurance product over distance marketing mode. Regarding verification process, the guidelines require the insurers to make verification calls in order to monitor quality of sales to a minimum of 3 per cent of policyholders who buy insurance over distance marketing mode.
The compliance officer of each insurer will be required to submit to the regulator every financial year a certificate confirming that all the provisions of the said guidelines are complied with by the insurer.