Standard proposal form requirement put off

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SummaryIrda had issued a gazette for a standard proposal form in February last year and it was to be implemented in August itself.

and details of charges are explained to the proposer. Irda had earlier underlined that the objective of the standard proposal form for individual policies in life insurance was to ensure that it takes into consideration all relevant questions that are required to understand the need for a particular product and make a recommendation to the prospect, bringing in transparency and protect the prospects' interest.

Irda had earlier made it mandatory that an insurer or agent or bancassurance or broker or the insurer's employees where direct sales are involved, would have to make reasonable efforts to obtain a consumer’s suitability information prior to making a recommendation.

Moreover, based on the suitability of information gathered from the prospect, the insurer or agent must have reasonable grounds to believe that the product being recommended to the prospect is suitable for him.

The review would be stored in a physical or an electronic format or any any other process that accurately reproduces the actual document and can stand legal scrutiny. Analysts say the most viable option by life insurers could be to provide online tools on need analysis which can be used at various life stages of the customer.

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