Irdai chief urges insurers to eliminate dark patterns from websites, apps

Ajay Seth says deceptive digital practices erode consumer trust and urges insurers to improve transparency, informed consent and customer-first design across online platforms

There is an urgent need to eliminate dark patterns from the insurance ecosystem to preserve consumer trust and improve access to insurance products, while insurers must undertake an honest assessment of their own organisations, Insurance Regulatory and Development Authority of India (Irdai) Chairman Ajay Seth said at an event in New Delhi on Saturday.

 

"The expectation is very clearly that the public needs full transparency; the dark patterns must not be there in our system," Seth said.

 

Dark patterns are digital mechanisms that misguide users into sharing personal information or making decisions they may not have intended to make. Common practices include spam calls, making it difficult to cancel subscriptions, and creating barriers that require users to share personal information before accessing products or pricing.

Personal details should not precede pricing

Giving an example of a dark pattern, Seth said users visiting insurance websites are often asked to provide personal information that is not relevant to the process of buying insurance or checking prices.

 

"If somebody wants to buy a product, they should be able to go to the website and check the product and its price. Instead, the website first asks for your name, mobile number and consent to be contacted, even before telling you the price," he said.

 

The Irdai defines dark patterns as deceptive techniques used on websites and apps to manipulate users into making decisions they may not have intended to make.

Irdai monitoring compliance

The comments come after the regulator earlier this year partnered with the Institute of Public Auditors of India, a statutory body, to monitor dark patterns in the insurance sector over the next nine months.

 

The move followed Irdai's direction to insurers to conduct self-assessments on compliance with the Central Consumer Protection Authority's (CCPA's) dark pattern guidelines and submit their findings. Insurers, however, reported that they had found no dark patterns.

Focus on informed consent

On informed consent, Seth said insurers should ensure that policyholders understand the terms and conditions before providing consent.

 

"Informed consent is important in building trust," he said, adding that seeking consent should not be treated merely as a legal formality but as an important trust-building exercise.

 

"We are all reviewing our websites, but it is too early to mention steps that have been taken. We need to do what is right for the customer," Amit Ganorkar, chief executive officer of Tata AIG General Insurance Company, said.

 

Earlier this month, a study published by LocalCircles, based on consumer complaints, social media posts and the platform's AI-powered dark pattern detection tool, found that nearly 95 per cent of the top 300 publicly listed companies used at least one dark pattern.

 

"As soon as the circular from Irdai came, we consulted a few experts and sent out advisories to all our members," Narendra Kumar Bharindwal, president of the Insurance Brokers Association of India (IBAI), said.