Source : FC: May 30 2010 , Mumbai
Soon, life and general insurance companies will have to call up individuals to whom policies are sold by telemarketers to confirm the sale before issuing the policy document.
Insurance Regulatory and Development Authority (Irda) is in the process of formulating telemarketing guidelines, which are expected to be announced by next month, a senior Irda official said.
According to him, the guidelines aim to curb rising cases of mis-selling among life and general insurance companies, where the policy details are not explained to customers before selling. “Often, policies that are sold to people, do not match their requirements and income and they lapse. That is why the rate of policy lapsing is high,” the official said.
The guidelines will ask companies to follow a set format of questions before trying to sell a policy over phone. In case an agent sells a policy personally, the terms and conditions have to be reiterated to the buyer over phone after the application reaches the insurer.
There are three aspects of telemarketing in case of life and general insurance companies. First, when the policy is solicited and the entire process is done over the phone. Second, when an agent has sold a policy, it needs to be reconfirmed with a call. And third, when travel and motor insurance policies are sold bundled with other products such as a credit card or car, the customer has to made fully aware what she is getting into. “We will ask insurance companies to record and preserve call details until the end of the contract,” the official said.
Customers will now be asked about their eligibility, income and needs over the phone again before completing the sales process. Companies such as Aegon Religare Life, Star Union Daiichi Life, among others, are already following the post sale call process. Irda will now make it mandatory for all companies to follow.
Irda is also mulling a proposal to allow only trained personnel to sell insurance policies over phone. “Discussions are on whether to allow only insurance companies and their trained agents to do telemarketing or to allow third parties to do it. In the second case, the telemarketer has to be a trained agent,” official said.
In developed markets such as the US and the UK, telemarketing is prevalent, but the process
Insurance Regulatory and Development Authority (Irda) is in the process of formulating telemarketing guidelines, which are expected to be announced by next month, a senior Irda official said.
According to him, the guidelines aim to curb rising cases of mis-selling among life and general insurance companies, where the policy details are not explained to customers before selling. “Often, policies that are sold to people, do not match their requirements and income and they lapse. That is why the rate of policy lapsing is high,” the official said.
The guidelines will ask companies to follow a set format of questions before trying to sell a policy over phone. In case an agent sells a policy personally, the terms and conditions have to be reiterated to the buyer over phone after the application reaches the insurer.
There are three aspects of telemarketing in case of life and general insurance companies. First, when the policy is solicited and the entire process is done over the phone. Second, when an agent has sold a policy, it needs to be reconfirmed with a call. And third, when travel and motor insurance policies are sold bundled with other products such as a credit card or car, the customer has to made fully aware what she is getting into. “We will ask insurance companies to record and preserve call details until the end of the contract,” the official said.
Customers will now be asked about their eligibility, income and needs over the phone again before completing the sales process. Companies such as Aegon Religare Life, Star Union Daiichi Life, among others, are already following the post sale call process. Irda will now make it mandatory for all companies to follow.
Irda is also mulling a proposal to allow only trained personnel to sell insurance policies over phone. “Discussions are on whether to allow only insurance companies and their trained agents to do telemarketing or to allow third parties to do it. In the second case, the telemarketer has to be a trained agent,” official said.
In developed markets such as the US and the UK, telemarketing is prevalent, but the process
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