Page 54 - Insurance Times December 2022

start its operations. Also, 19 applications are in pipeline at caps are proposed to be replaced with a single overall limit
various stages, out of which one is expected to be approved in general and health insurance. For life insurance, the
in the next meeting. segmental limits of expenses for certain segments is
proposed to be enhanced, with overall regulatory monitoring
Other reforms on the anvil at the company level.
Exposure drafts on Expenses of Management
For commissions, the maximum limits as specified in the
Regulations and Commission Regulations
current regulations are proposed to be removed with
Exposure drafts of these regulations were placed for public
commissions being linked to the overall limit of expense of
comments in August. Various comments received on the
management. This will enable insurers to devise commission
same were discussed and deliberated. Further, a series of
structures incentivizing the intermediaries in line with their
meetings was also held with insurers and intermediaries
solicitation efforts and also making insurance more
(including individual agents, corporate agents, brokers, and
affordable.
their respective associations, etc.) to discuss the proposed
amendments at length. Amendments to regulations follow a consultative process.
IRDAI’s mission of protection of policyholders’ interest and
Following the discussions and meetings, the proposals were orderly growth of the insurance sector is always a priority.
reviewed and placed for public comments on 23.11.2022. Efforts are made to reach the last mile by strengthening the
entire ecosystem. A periodic review of the regulatory
The revisions are aimed at enhancing flexibility and framework will be a continuous exercise to ensure that it is
autonomy to the Board in the operational and financial in sync with the emerging trends and dynamics of market
decisions. For expenses of management, various segmental and serves the intended objective of ‘Insurance for All’.

Lapsed policies? Beware of frauds mis-selling insurance
In 2017, Swapan Kumar Burman, a resident of Tamluk in West Bengal, got a phone call from an insurance agent. The
message was simple: he was eligible for a bonus that had accumulated on his life insurance policy. Burman's 2014 policy
had lapsed after he failed to pay some premiums but the agent said he could claim the bonus on payment of a lump sum
amount to revive the policy. And Burman did what was asked of him. But that was just the beginning of his problems.
Burman says, "The agent told me to pay some lump sum amount to receive the bonus. I did. After a while, he asked
me to pay more, saying I needed to buy a new insurance policy to get the bonus."
Burman soon found himself in a catch-22 situation-shelling out more funds in pursuit of the money that he had paid
so far. "They duped me into buying several insurance policies, until I realized that I had amassed 64 new policies from
nine insurers. These include policies registered in my name and those of my wife and my son as well, besides 12 others
taken in the names of my colleagues. I spent Rs. 42 lakh on new policies over a period of four years," says Burman.
When Burman realized that he was the victim of an elaborate fraud, he approached Nitin Balchandani of Insurance
Angels, who helped him escalate the matter with the insurers and the insurance ombudsman. A couple of insurers have
since settled the payment in full. Others have merged their multiple policies into one single policy but said they could
refund the full amount only after five years. Some cases are still pending. Burman has recovered Rs. 22 lakh so far.
Parul Jain (36), an IT professional working with IT firm TCS in Hyderabad, faced a similar predicament after she got a
phone call regarding her insurance policy. The telecaller told her about the privileged benefit of Rs. 6 lakh for being
a long-term customer. "They told me that they wanted the customer to receive the benefit, and not the agent, but
that I needed to buy a new policy to get myself listed in their database directly. The new policy thus issued was from
a different insurer. I was smart enough to ask them why there was this need for a new policy but was naive to believe
the two insurers were involved in a tie-up. They convinced me," Jain says. She paid over Rs. 3.5 lakh for four policies
within a year.
Jain escalated the matter with the insurance company and the ombudsman with the help of Insurance Samadhan, a
grievance redressal platform. The insurance ombudsman has issued an award in Jain's favour. She is hoping to get her
money back soon. (Source: Mint)

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