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Need to simplify, standardise life insurance policies: IRDAI official

20 December, 2018 12:09 PM
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Need to simplify, standardise life insurance policies: IRDAI official

IRDAI has asked insurers to cut down on legal jargons in policy documents

There is a need to standardise and simplify life insurance policy documents, said a regulatory official. Speaking at an event by Association of Insurance Claims Management (AiCM), V Jayanth Kumar, Chief General Manager (life), IRDAI said the regulator has already taken steps to bridge the gap.

Kumar said the Insurance Regulatory and Development Authority of India (IRDAI) has brought out norms to have a standard product structure across companies. He added that it is up to insurance companies to ensure that products are made easier for customers to understand.

"There is a need to cut legal jargons in policy documents so that customers understand what product they are buying," he added.

With respect to frauds, Kumar said there is a need to eliminate such instances at the underwriting stage itself. He added that the assistance of data from credit information companies could also be taken to minimise frauds.

"At the time of accepting a new proposal, an insurance company could get real-time data on past records of such individuals. This data could be used to take a decision," he added.

In terms of the fraud, Kumar said 49 percent of the total number of frauds were perpetrated by intermediaries while 28 percent were by policyholders. He added there is a need to take stringent action for fraud by agents and other intermediaries.

In future, he said there is a need to get an insurance company to exchange data on fraud so that a repository is created for such cases. This database can be used as a reference point at the time of issuance of any policy.

Source: moneycontrol.com

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