Home >Insurance >News >Mis-selling complaints go down, shows Irdai report

The Insurance Regulatory and Development Authority’s (Irdai) annual report released on 10 January outlined the regulator’s focus on curbing mis-selling and reported fewer mis-selling complaints. The regulator also released data on claims settlement ratio of insurance companies.

What if the insurance agent or broker sells the policy promising a single premium or a limited term policy, but the policy actually turns out to be a regular premium one? In such a case, the buyer has no option but to surrender the policy or stop paying the premium. Selling a policy by giving wrong or unrealistic information can result in financial loss.

As per the Irdai report, the analysis of mis-selling complaints data of private life insurers shows that the number has reduced from 47,503 in 2017-18 to 35,178 in 2019-20. Also, the incidence of mis-selling complaints per 10,000 policies sold has reduced over the years. The complaints being disposed of in favour of the complainant has reduced slightly from 27% in 2017-18 to 25% in 2019-20. Analysis of channel-wise mis-selling complaints of private life insurers reveals that banks and broker channels received most mis-selling complaints than other channels.

However, there are many reasons why people may not be able to report complaints. For instance, last year, due to covid-19, many people would not have bothered to report mis-selling. There could be other technical errors too.

Mrin Agarwal, founder director, Finsafe India, said that mis-selling of insurance is rampant. In most cases, consumers themselves are not aware that they are being overpromised returns. Insurance agents sell policies claiming 8% returns per annum but the actual XIRR (real rate of return) comes at 3-4% only. “So, the numbers reported are minuscule and hence not to be relied upon completely," said Agarwal.

However, Raj Khosla, managing director, MyMoneyMantra, said that the reduction in the number of complaints is due to the efforts put in by the industry. Irdai has taken several measures, while insurers have changed the incentives given to agents for selling policies and have come up with processes where they call their customers and help them understand the policy, said Khosla. “Also, the understanding of insurance has increased among people living in tier 1 cities. Hence, one can rely on Irdai data," said Khosla.


To expedite the complaint redressal system, the regulator has also provided alternative channels to receive complaints against insurers. The Irdai Grievance Call Centre (IGCC) receives complaints through a toll-free number and by email and registers complaints apart from furnishing the status of the resolution.

Irdai has also put in place the Integrated Grievance Management System (IGMS), an online system for grievance management that is not only a gateway for registering and tracking grievances online but also acts as an industry-wide grievance repository for Irdai to monitor the disposal of grievances by insurance companies.

As per the annual report, during 2019-20, life insurance companies resolved 98.26% of the complaints handled. Private life insurers resolved 99.95% of the complaints reported, while LIC resolved 97.45% of the complaints, it said.


The purpose of buying a life insurance policy is that your beneficiaries get the sum assured after your demise. It is, therefore, important to understand which insurer has maintained a good track record in settling claims. Check the latest data on claim settlement at

As per the annual report, the claim settlement ratio of LIC dropped to 96.69% as of 31 March 2020, when compared to 97.79% as of 31 March 2019. The proportion of repudiations has increased to 0.81% in 2019-20 compared to 0.43% in the previous year. For private insurers, the settlement ratio increased to 97.18% during 2019-20 compared to 96.64% in the previous year. The proportion of repudiation came down to 2.42% in 2019-20 compared to 2.83% in the previous year.


When you buy a life insurance policy, you must understand the purpose of buying. While there are many genuine agents and brokers, there are some rogue ones too who try to sell life insurance by misrepresenting facts and sometimes present a distorted picture of the features of an insurance policy. Take note of figures such as claim settlement ratio before buying a policy and familiarize yourself with the complaints redressal process if you have been missold a policy.

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