Mumbai: In an effort to stop mis-selling of insurance policies, the Insurance Regulator and Development Authority, or Irda, on Friday issued draft regulations asking insurers to supervise agents and submit a complete needs analysis report for each prospective customer. In a first of its kind move, the report has recommended that life insurers compulsorily collect details of customers’ lifestyle, financial health, future plans, and exact need of insurance and so on.
“ ... keeping the vulnerable public protected from unfair practices is of utmost importance. Unfair practices could arise in a scenario of increasing number of insurers, intermediaries and insurance products and severe competition for business,” the report said.
In order to assess the exact financial needs of customers, it has been proposed to monitor the role of the intermediaries by the insurers. Irda should require insurers to establish a system to supervise the recommendations made to customers by intermediaries, it said. Irda has sought feedback on the proposals by 5 July.