Page 8 - Insurance Times July 2022

IRDAI mulls linking insur- country, and the government's push to respond to the dynamic needs at a
insure every citizen, fraudulent and sus- quicker pace, he added.
ance fraud with credit
picious activities have risen phenom-
The nod, however, comes with certain
score enally, and need intervention, the group conditions that the insurers should put
added.
IRDAI is considering a proposal to make in place a board-approved policy on
insurance frauds a parameter for cal- product and pricing. "This makes man-
Removal of pre-approval
culating credit scores in an attempt to agement of insurance companies more
put a lid on the increase in such activity. for life cover products will disciplined and steps on focus on corpo-
rate governance," said Vice-President
The proposal, which is a part of the rec-
push innovation
of a private life insurer.
ommendations made by a working
IRDAI's decision to do away with pre-
group formed by IRDAI and the Gen-
approval for launch of life insurance
eral Insurance Council, suggests that IRDAI told to look into role
products will go a long way in providing
insurance frauds should feature when
ease of business, innovation in the in- of agents selling life poli-
the risk profiles of individuals are evalu-
dustry, according to experts. cies
ated and should be used to calculate
The regulator had recently, permitted The National Consumer Disputes
their credit scores.
life insurers to launch products without Redressal Commission (NCDRC) has di-
A poor credit score can deprive a per-
prior approval. The move will enable rected the IRDAI to look into the role of
son of financial services such as loans
the launch of most products (except in- insurance agents selling life insurance
and credit cards, and deter him from
dividual savings, individual pension and policies.
indulging in fraud.
annuity) in a timely manner according
The apex consumer commission asked
While making a case for this proposal, the to the dynamic needs of the market,
the IRDAI to issue fresh guidelines and
working group said a fraud attempt on according to the regulator.
modify proposal forms to clearly bring
an insurance company can be replicated
"This is a forward looking and progres- to the notice of customers that non-dis-
with other financial institutions, too.
sive move for the industry as the prin- closure of medical conditions would lead
The proposal is being considered by the ciple-based approach encourages insur- to repudiation.
insurance regulator, as such frauds ers to be more responsible and innova- A bench of presiding member Dr S M
have been costing insurers dearly, with tive in their product designs. It will add Kantikar and member Binoy Kumar said
some estimates pegging their losses at momentum to the insurance sector, this would avoid unnecessary mental
over Rs. 45,000 crore a year. This has both in terms of designing and pricing," agony and expenses of the insured.
prompted insurers to jack up premiums Subhrajit Mukhopadhyay, Executive Di-
The NCDRC was hearing an appeal filed
for customers to offset such losses, the rector, Edelweiss Tokio Life said.
by HDFC Standard Life lnsurance Com-
working group has said.
This will significantly improve the time pany Limited challenging an order of the
With more insurance penetration in the to market, thus, enabling insurers to state consumer disputes redressal com-
8 The Insurance Times, July 2022