Insurance regulator Irda today issued guidelines on distance marketing of products to protect the interest of people who buy policies over phone or Internet .
The Insurance Regulatory and Development Authority (Irda) said that distance marketing, which includes phone calls, SMSes and emails, should be done through employees of insurers or brokers, or specified person of corporate agent or telemarketers.
Telecallers of insurance products should be trained according to the syllabus prescribed by the Insurance Regulatory and Development Authority (IRDA) and they should inform clients that the call is being recorded and that the client is entitled to a voice copy, according to these guidelines. In all, instances where a policy is issued without obtaining a proposal in physical form, the insurers should provide a verbal transcript of the voice/electronic record of the queries raised and answers on the basis of which the policy has been underwritten, along with the policy bond, the order said.
The records pertaining to every call made and SMS sent by a telemarketer/corporate agent/broker that materialises into a policy shall be transferred to the insurer’s location within 30 days of conclusion of sale. In the case of telephone calls, the records transferred shall be the recordings of the entire conversation. Insurers/brokers shall monitor the calls live by arranging for listening to at least 1 per cent of the calls as they happen.
"Insurance brokers shall not exclusively promote the products of any particular insurer, and shall suggest the best available product in the market that fits the needs of the client," Irda said. The guidelines also require insurance brokers to provide up-to-date price comparison charts of all the available and suitable products under each category. They, however, cap premium limit for sale of unit-linked products (ULIPs) by way of distance marketing and bars selling of Universal Life Products.
Besides, insurers cannot market ULIPs where single premium is more than Rs 1 lakh. Also they cannot solicit ULIPs by way of telephone call or voice SMS , wherein annualised non-single premium exceed Rs 50,000. "No variable insurance product shall be solicited or sold over distance marketing mode," the Irda added.
Insurance companies are mandated to implement the guidelines from October 1, 2011. As per the guidelines, telemarketers are required to preserve the recordings of the conversation with a prospective customer till the policy is transferred to the insurer. The records shall be open to inspection by the Irda. At the time of marketing through electronic mode, the Irda has asked insurers to obtain consent of the client before proceeding to the next stage. Also telecallers should ascertain whether customers are interested to continue with the subject. "The hours during which calls are made shall be in accordance with orders issued by Trai/DoT from time to time... No inconvenience, nuisance or harm shall be caused to the clients in the course of solicitation or thereafter," Irda said.
The compliance officer of each insurer shall submit to Irda, at the end of each financial year, a certificate confirming that the insurer has complied with all the provisions of these guidelines during the financial year.
Source: PTI