 "Mis-selling of life insurance policies at alarming level, says Irdai")
The Insurance Regulatory and Development Authority of India (Irdai’s) Member Satyajit Tripathy on Tuesday said that complaints about product mis-selling in life insurance has increased to an alarming level so much so that it has grabbed the attention of the policy makers.
He further added that grievances vary between life and non-life insurance sector. Life insurance grievances are often related to the product, while non-life grievances usually concern claim payments and exclusions and in order to increase the penetration, the industry must address these grievances.
Speaking at the CII Financial Summit 3.0 in Mumbai Tripathy said that, “Grouse (in life insurance) is about mis-selling a product and I must say that it is at an alarming level. It is at an alarming level because it has caught the attention of the policy makers. If we are talking about increasing the penetration, sale of various products, making it affordable, then we must address these grievances.”
According to Irdai’s annual report for FY23 detailing status of grievances as per Bima Bharosa portal, the total number of grievances registered with life insurers stood at 1,24,293 where the share of Unfair Business Practices Grievances stood at 20 per cent. In case of non-life insurers, the number of grievances stood at 78,347 where those related to claims accounted for 66 per cent.
Tripathy said that, in the case of the non-life insurance sector, the grievances for the non-life sector is more about the payment of claims in terms of claims being rejected or substantially less claims paid. Majority of the grievances came from health insurance.
As a method of making claims a seamless process, he elaborated the role of AI driven process in making claims process a paperless activity in majority of retail motor insurance claims thereby reducing trust deficit except in case of a few complaints. Similarly, efforts by the Ministry of Health, Insurance Regulator and other stakeholders in developing cashless facilities for health insurance is likely to ensure that almost the majority of the population gets into the health insurance space soon.