The Insurance Regulatory and Development Authority (Irda) has now proposed to streamline the promotion of insurance products through distance sales channels, such as the telephone and the internet. It has said it will issue rules in this regard and these will cover selling by ‘voice mode’, which includes telephone calls, ‘electronic mode’ (e-mails, internet and interactive television) and also the ‘physical mode’, though postal mail and newspapers.
Web-based selling of insurance products is at a nascent stage in India. Although the volumes here are low, the regulator said the guidelines would cover distance marketing activities of insurers, brokers at the stages of offer, negotiation and conclusion of sale. It has asked insurers to ensure every telecaller is trained either in-house or at an institute accredited for pre-license training of agents.
Moreover, insurers or brokers will have to prepare standardised scripts for presentation of benefits, features and disclosures under each of the products proposed to be sold under telephonic mode. Irda wants the name of the insurer, name of the caller the language options available and the purpose of approach to be clearly highlighted.
The telecaller will have to ask if the client is interested in continuing with the subject, and the process of solicitation should proceed further only if he gives his consent in explicit terms. There should be an exit option.
In case of life insurance, pension and other products with savings and investment components, the regulator says wherever the investment risk in the solicited product is to be borne by the client, this should be prominently highlighted in the communication. The exact nature of the guarantee such as NAV guarantee, capital protection, etc and their implications will have to be clearly explained.
In addition, insurance brokers will be given the liberty to solicit insurance over distance mode. Brokers will, however, have to avoid promoting the products of any particular insurer or a few insurers exclusively, by suggesting a product that fits the client’s needs.
The regulator said price comparison charts should be up to date. Brokers will not be paid any remuneration other than brokerage towards policies procured over distance mode.
Insurers will have to monitor the quality of sales through telephonic confirmation, post-sales, under all modes of marketing, including in-person and distance modes, by calling up not less than 20 per cent of all the policyholders every month.