Raking up the issue of ?mis-selling? once again, the Insurance Regulatory Development Authority (Irda) chairman J Hari Narayan said that there has been a fall in the number of complaints on mis-selling in the recent past.
About 11% to 12% of the total complaints being received by the regulator belong to mis-selling, as against the earlier 14% to 15%. However, Narayan pointed out that it is not an accurate measure.
Speaking to passing out students of the Institute of Insurance and Risk Management (IIRM) in Hyderabad, Narayan said that the policy document is a vital paper and it sets the tone for the company on the commitments to the policyholder. ?It (policy document) is the word that the insurance company gives to the policyholder,? he pointed out.
Referring to western countries such as the US, UK and Japan, where the policy document is more simple to understand by the customers, Narayan commented, ??we have a long, long way to go.? He felt that there is a need for an open debate on the issue of mis-selling in the country.
Later, speaking to media on the sidelines at the graduate ceremony of IIRM, Narayan said that some of the insurance companies are calling the unit linked insurance policy (ULIP) holders and confirming whether they know the norms of insurance cover and they agree to it or not. ?I feel this is how companies have to deal with ULIPs to counter mis-selling. Always, there should be a constant dialogue between the insurer and the insured,? Narayan said. In fact, the ULIP must be sold after taking consent in writing from the ULIP holder, he added.
On the valuation of the insurance companies, Narayan said that the regulator would wait till the Institute of Actuaries develops the standards. ?I cannot say when they will submit the standards, but Irda will make them mandatory for the companies to follow,? he said.