M Nagaraju, Secretary, Financial Services
Banks need to ensure that there is no mis-selling of insurance to customer and premium are affordable so as to help increase market penetration for such products
New Delhi: Observing that high premiums dissuade people from buying insurance, M Nagaraju, Secretary, Financial Services has exhorted that insurers have to ensure that premiums are reasonable.
Banks need to ensure that there is no mis-selling of insurance to customer and premium are affordable so as to help increase market penetration for such products, he said at an event in New Delhi on Friday to announce strategic partnerships between Central Bank of India and Generali Group of Italy.
According to Nagaraju, mis-selling often leads to higher premiums for customers and as a result policyholders don’t renew their premium.
Companies need to honour the commitment made in the policy and deviation can lead to breach of trust, he said
Insurance, which is a sensitive financial product, should be explained thoroughly to customers before onboarding them,
Often, a particular product is explained to the customer, but a separate product is sold to them, he said.
Insurance companies will survive only when people have trust, he said.
Both insurance regulator Irdai and the Finance Ministry have repeatedly asked the banks and insurance companies to desist temptation of mis-selling of policies to customers as part of investor protection.
While the bancassurance model has significantly contributed to improving insurance penetration across the country, it has also raised concerns about instances of mis-selling, finance minister Nirmala Sitharaman had said at an event in October.