(L to R)-R Venkatachalam Iyer, MD & CEO Tata AIA, Amit Jhingran, MD & CEO (SBI Life, Piyush Pandey, advertising professional, Swaminathan Iyer, member, Life, IRDAI, Kamlesh Rao, MD&CEO,ABSLI, RK Patnaik, MD, LIC, Rushabh Gandhi, MD&CEO India First at an event in Mumbai to launch life insurance industry’s multimedia awareness campaign
However, the IRDAI will now keep an eye on mis-selling by insurance companies through banks on case to case basis as it has found out that such cases in bancassurance channel is not very high, sources said.
Mumbai: In a change of mind, the Insurance Regulatory and Development Authority of India (IRDAI) had dropped its earlier plan to bring in new bancassurance rules for reducing mis-selling by banks, which have insurance subsidiaries.
Speaking at the event for unveiling Indian life insurance industry’s Rs 450 crore three-year multimedia awareness campaign with the theme ‘Sabse Pehle Life Insurance, Irdai’s member (life) Swaminathan Iyer said mis-selling in the life insurance sector is not alarming and going by the available data around 0.41 per cent in 100 policies are mis-sold.
However, the IRDAI will now keep an eye on mis-selling by insurance companies through banks on case to case basis as it has found out that such cases in bancassurance channel is not very high, sources said.
Earlier, IRDAI was concerned about the heavy reliance of insurance companies on their parent banks for bancassurance business.
Iyer said India is still the 10th largest market in the world from a penetration perspective, but it has a long way to go.
He said only about 36 crore of the 140 crore people have a cover at present,
The migration to and out of big cities exposes people to financial vulnerabilities, which make insurance necessary, said Iyer.
“We will spend at least Rs 150-160 crore per year, and we have commitments lined up to run the campaign at least for three years,” said Kamlesh Rao, chairman of the Insurance Awareness Committee
The life insurers will have contributions from all life insurance players on the basis of their premium incomes..
It can be noted that the penetration of insurance has dipped for the last few years, and the overall premium collected by companies stands at 3.2 per cent of GDP in FY25 against 4 per cent in FY23 and 3.7 per cent in FY24.
A survey done by the council also revealed that while people are aware and have taken cover, it may be inadequate for them.
The campaign focuses on term, child and savings plans initially and also includes other aspects.
Replying to a question on whether the watchdog is mulling allowing insurers to invest in gold exchange-traded funds, Iyer said that Irdai looks at all requests that are made, and the interests of policyholders and the growth of the industry are of importance to it.
India continues to grapple with a significant life insurance protection gap—one that has risen from 83% in 2019 to 87% in 2023, The gap is even more pronounced among those aged 18–35, exceeding 90%. This growing vulnerability poses a serious threat to families’ financial security and aspirations.
Massive campaign to create insurance awareness by IRDAI wil have visible impact on the penetrative of life insurance. This should be supported by dynamic grievance redressal system through easy access by the policyholdersThe . Insurance being s long term financial provision it’s continuity depends upon timely response to various requirements of the policy holder.
IRDAI has hardly done any substantial work to address the grievance of victims of mis-selling. Although it was tried to defend through partial statistics.Financial crunch faced by the victim of mis-selling can only tell the truth. Why Bank promoted insurance companies depend only on sponsor bank and can not access the market directly. Not to talk about the unethical practices in the field.
IRDA unlike RBI is an extremely slack Regulator. If the bank authorities do not come forward and compels the insurance companies to compensate the aggrieved victim ,it would have been reduced to a pandemonium and free loot.