IRDAI to issue fresh guidelines for banks to stop miss-selling of insurance products: Chairperson
Mumbai, June 30
Insurance Regulatory and Development Authority of India Chairperson Ajay Seth on Tuesday said that the regulator will soon issue fresh guidelines for banks to stop miss-selling of insurance products.
Addressing the media at an event here, IRDAI chief stated that the 'Bima Sugam' platform is likely to be launched by September this year covering motor, health and term insurance. The website will kickstart with motor insurance, then move on to health and eventually, term-life products.
When speaking on the foreign direct investment (FDI) into the insurance sector, Seth said that one foreign insurer has been approved to increase stake in an Indian life insurance firm, while other one is under the review process.
The government recently notified 100 per cent FDI in the insurance sector under the automatic route, paving the way for greater participation by overseas investors. Foreign investment in insurance companies will be subject to compliance with provisions of the Insurance Act, 1938, and mandatory approval from the IRDAI for undertaking insurance and related activities.
However, Life Insurance Corporation of India (LIC) will continue to operate under a separate framework, with foreign investment capped at 20 per cent under the automatic route.
In addition, 100 per cent FDI under the automatic route has been permitted for insurance intermediaries, including brokers, reinsurance brokers, insurance consultants, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents and insurance repositories, as notified by IRDAI from time to time.
At the event, Seth mentioned that the regulator is likely to come up with a new framework for product suitability in sales, choosing to offer illustrative guidance rather than restrictive rules.
IRDAI recently approved a new general insurance licence, marking second such approval in recent times.
Last month, IRDAI tightened rules on top executive remuneration, linking their bonuses and incentives to measurable customer outcomes, financial health and transparency disclosures. IRDAI said remuneration of Key Management Personnel (KMPs) including chief executives must be aligned with defined performance parameters such as claims settlement speed, grievance redressal and product performance.
— IANS
Reader Comments
Sir ji, yeh "suitability in sales" framework bahut zaroori hai! Last year my father was sold a ULIP saying it's "better than FD" but hidden charges ne returns khatam kar diye. Koi clear illustration do ki product kiske liye suitable hai, tab customer informed decision le sakta hai. 💯
Good to see IRDAI taking steps to protect consumers. The move to link executive bonuses to customer outcomes like claims settlement and grievance redressal is a game-changer for accountability. Now if only the enforcement was as strong as the intent. 🇮🇳
Bima Sugam going live by September is great news, especially for motor insurance renewals! But I hope the website is truly user-friendly and works in regional languages too, not just English and Hindi. Rural India bhi online insurance lena chahti hai. 🙏
Honestly, I'm skeptical about these "illustrative guidelines" instead of strict rules. Banks have found ways to mislead customers for decades. With 100% FDI now allowed, we really need iron-clad regulations to ensure foreign players don't exploit lack of financial literacy in smaller towns. Be careful what we wish for.
Good to see second general insurance licence being approved, more competition means better rates for customers! But please ensure these new players are financially strong and not fly-by-night operators. Customer should not suffer due to aggressive expansion. 🙏
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