Page 28 - Insurance Times July 2016

down turnaround times for policyholder servicing in its regu-
lations for protection of policyholders' interests brought out
in 2002 and these relate to right from the time before a
contract is entered into through to the point of all obliga-
tions under a contract being settled. Delays vis-a-vis these
timeframes would mean a deficiency in service. When there
is a deficiency in service, the prospect or policyholder, as the to ensure consumer satisfaction, investor protection and
case may be, may approach the grievance redress channel
of the insurer and the IRDA, if needed to escalate the case;
or the Ombudsman, if it falls within the jurisdiction of the
same.
11) IRDAI'S directives to resolve com-
plaints against insurers & greivance
dispossal:
11.1. The initiative of IRDA in implementing the Integrated
Grievance Management System (IGMS) has created a cen-
tral repository of industry complaints, which lends itself to
various types of analyses relating to conduct of business by
insurers. The regulatory interventions by IRDA on ULIPs have
brought down the percentage of complaints pertaining to
this category, reflecting an improvement in the conduct of
business in this area.
11.2. Prescription of a standard proposal form for life insur-
ance and the requirement that the insurers shall have in
place a "Prospect Product Matrix" that will determine suit-
ability of products based on needs analysis is an initiative
that will help reduce mis-selling.
11.3. In non-life insurance, analysis of the data on IGMS
shows that 'Non-receipt of Policy Bond' is the main cause of
complaint though complaints relating to claims come a close
second. Conduct of business concerns in this sector mostly
relate to health insurance and motor insurance - refusal to
give cover; refusal to renew; forced selling through tying
insurance with other goods and services; disputes related
to quantum of claim and disputes relating to liability under
a policy.
Conclusion:
In the Indian regulatory system, process & architecture,
what different regulators will manage is specifically defined
by law. Present system might not be the best system and is
not the only system in the world, but in India we have en-
acted ourselves a system where each sector is separate. The
scope of regulatory overlap is invariably limited as each Act
28 The Insurance Times, July 2016
carefully specifies the limits and what exactly are the roles
and functions of each of the regulators.
There are differences in opinion between IRDA & SEBI about
what the SEBI remit is and what SEBI believes its own merit
is - may this turf war may go on but ultimately both are here
financial stability. Things of this nature need definite clarity.
Having multiple regulators doing the similar task would not
be good for the consumers or the industry. So there must
be sufficient initiative of IRDA to resolve all these
disparities.
We find that management expenses of all the insurers af-
fect bottom lines more sharply, so IRDA intended to bring
in various systems to enable and cajole insurance compa-
nies and absolutely ensure that the insurers comply by look-
ing at extra solvency requirements. Moreover, as the Indian
insurance industry has already made a strong enough base
and going by the trend of the market - the days are very
near when one of the biggest contributors to the Indian
stock markets will be investment from the insurance
sector.
So the regulator has to tighten their control in manifolds.
Broadly speaking investment by insurance companies is regu-
lated by the provisions of the Insurance Act, with 50% of
investments going into government securities, 35% into
approved investment and 15% being in other than approved
investments. There are other issues such as concentration
and sector risks. From the regulatory point of view it has to
be typically ensured that the insurers must have in place
automated or efficient systems that can provide full range
of information.
To stop the general insurers' practice of giving discount
without any concern for base level threshold premium,
in the recent meeting in General Insurance Council, it has
been proposed that a minimum rate must be in place for all
classes of business in order to prevent mindless competition
in de-tariffed non-life sector. Let us expect that IRDA
must keep these product minimum rates at a strong
watch.
Reference: References have been taken from the contem-
porary text materials / various IRDA Reports / different
current discussions as read in hard & soft forms. 