IRDAI to issue fresh guidelines for banks to stop miss-selling of insurance products: Chairperson

Mumbai, June 30 (IANS) Insurance Regulatory and Development Authority of India (IRDAI) Chairperson Ajay Seth on Tuesday said that the regulator will soon issue fresh guidelines for banks to stop miss-selling of insurance products.

Addressing the media at an event here, IRDAI chief stated that the ‘Bima Sugam’ platform is likely to be launched by September this year covering motor, health and term insurance. The website will kickstart with motor insurance, then move on to health and eventually, term-life products.

When speaking on the foreign direct investment (FDI) into the insurance sector, Seth said that one foreign insurer has been approved to increase stake in an Indian life insurance firm, while other one is under the review process.

The government recently notified 100 per cent FDI in the insurance sector under the automatic route, paving the way for greater participation by overseas investors. Foreign investment in insurance companies will be subject to compliance with provisions of the Insurance Act, 1938, and mandatory approval from the IRDAI for undertaking insurance and related activities.

However, Life Insurance Corporation of India (LIC) will continue to operate under a separate framework, with foreign investment capped at 20 per cent under the automatic route.

In addition, 100 per cent FDI under the automatic route has been permitted for insurance intermediaries, including brokers, reinsurance brokers, insurance consultants, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents and insurance repositories, as notified by IRDAI from time to time.

At the event, Seth mentioned that the regulator is likely to come up with a new framework for product suitability in sales, choosing to offer illustrative guidance rather than restrictive rules.

IRDAI recently approved a new general insurance licence, marking second such approval in recent times.

Last month, IRDAI tightened rules on top executive remuneration, linking their bonuses and incentives to measurable customer outcomes, financial health and transparency disclosures. IRDAI said remuneration of Key Management Personnel (KMPs) including chief executives must be aligned with defined performance parameters such as claims settlement speed, grievance redressal and product performance.

—IANS

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