Page 7 - Life Insurance Today December 2017

Ministry of Finance, Income Tax Department etc. The Increased incidence of mis-selling can adversely impact
above list is only an illustrative - and not an exhaustive growth in the insurance industry which in turn would
one. impact the availability of long term funds for economic
development from the insurance sector. Hence, while
Mis-selling is mostly in life insurance sector and is also there is need to assess and eradicate mis-selling from
prevalent to an extent in health insurance segment where insurance industry, there is also a need to reassure general
misrepresentations about benefits or coverage or both are public that the regulatory framework of insurance business
made to solicit and sell health cover. In non-life policies, is sound enough to protect policyholders' interests and
there is not much of mis-selling. The focus therefore is on grievances, if any, are capable of being resolved by insurers
mis-selling in the sale of life insurance products. or settled / adjudicated by insurance ombudsmen or
consumer fora.

Integrated Grievance
Management System
(IGMS) introduced by
IRDAI in 2011 is a
computerized industry-
wide grievance repository
for the insurance sector. In
IGMS, the complaints
relating to mis-selling are
included under the broad
category of "Unfair
Business Practices". The
Complaints & Impact of Mis-selling: complaints relating to broad head of 'unfair business
practices' consist of complaints falling within the following
There has to be a policy level change to ensure that agents
complaint descriptions:
who cross a certain level of mis-selling are not hired by
1. Product differs from what was requested or disclosed.
any other insurance firm. Complaints on unfair business
2. Term (Period) of the policy is different/ altered
practices affect the sentiment about the insurance sector
without consent
in general and life insurance sector in particular. This would
significantly impact the initiatives aimed at enhancing the 3. Mode of premium payment differs from requested or
level of insurance inclusion as measured by indicators such disclosed
as insurance penetration (measured as ratio of premium 4. Annuity/Commutation/Cash Option / Rider/other
to GDP) and insurance density (measured as ratio of Options not included as requested
premium in USD to population).
5. Proposed Insurance not in the interest of proposer
6. Intermediary did not provide material information
concerning proposed cover
7. Single premium Policy issued as Annual premium
policy
8. Tampering, Corrections, forgery of proposal or related
papers
9. Credit/Debit card debited without consent of
Consumer

Never ascribe to malice, that which can be explained by incompetence.

Life Insurance Today December 2017 7

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