Summary: The IRDAI (Protection of Policyholders’ Interest, Operations and Allied Matters of Insurers) Regulations, 2024, effective April 1, 2024, consolidate previous regulations to enhance policyholder protection and ensure fair insurance practices. A key aspect of these regulations pertains to advertising. An “advertisement” is broadly defined as any communication influencing prospects for insurance product solicitation or sale, encompassing both insurance advertisements (product-specific) and institutional advertisements (brand promotion). The regulations mandate that all advertisements must be fair, true, and not misleading, clearly disclosing potential risks, limitations, and exclusions. Insurers must prominently display their registered name and logo. Distribution channels can only advertise products on behalf of insurers, not as direct offerings. Strict prohibitions are in place against claims that obscure terms, exceed reasonable expectations, or use illegible text. All social media content must comply, and insurers are responsible for overseeing their distribution channels’ advertising activities to prevent unfair practices. Importantly, every advertisement, whether from a distribution channel or an intermediary, requires written approval from the insurer. The regulations also establish a Board-approved advertisement committee comprising Key Management Persons and a permanent invitee from the Product Management Committee (PMC), responsible for approving advertisements in line with product design and market conduct principles. This committee’s decisions are final, and they are accountable for all approved advertisements. Insurers are required to maintain a register of all advertisements and upload approved ones to their website.
IRDAI (PPHI, OPERATIONS AND ALLIED MATTERS OF INSURERS) REGULATIONS, 2024 (ADVERTISING)
Notification No.: F. No. IRDAI/Reg/11/205/2024 Date: 20th March 2024
Dear Friends,
As you are aware that on recommendations of Regulations Review Committee the Authority has come out with Exposure Draft on IRDAI( Protection of Policyholders’ Interest, Operations and Allied Matters of Insurers) Regulations, 2014 and for comments and suggestions of all stakeholders.
The IRDAI, after considering suggestions received from various stakeholders notified IRDAI( Protection of Policyholders’ Interest ,Operations and Allied Matters of Insurers) Regulations, 2024.
The IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024 consolidate eight regulations into a unified structure, focusing on several key objectives aimed at ensuring fair treatment of prospects during solicitation and sale of insurance policies and protecting the interests of policyholders throughout their engagement with insurers and distribution channels.
These regulations emphasize the adoption of standard procedures and best practices by insurers and distribution channels to fulfill their obligations towards policyholders, including grievance redressal and policyholder-centric governance.
Additionally, the regulations aim to promote prudent practices in risk management related to outsourcing activities by insurers.
Furthermore, the regulations ensure that the opening or closing of places of business by insurers, both domestically and internationally, is conducted in a manner that prioritizes the interests of policyholders.
In conclusion, all of these measures are poised to propel the Indian insurance industry towards greater efficiency and effectiveness leading towards the vision of Insurance for All by 2047.
These regulations shall come into force from 1st April 2024.
LET’S DISCUSS REGULATIONS RELATED TO ADVERTISING MATTERS
PART-B
CHAPTER I; ADVERTISING
REGULATION 26: DEFINITIONS
Regulation 26(2) “Advertisement” means a communication, issued through any mode or medium, addressed to the public or section of it, the purpose of which is to influence the opinion or behavior of prospects for facilitating solicitation or sale of insurance products and includes insurance advertisements and institutional advertisements.
Regulation 26(5) “e-Insurance Account” or “eIA” means an electronic insurance account for maintaining insurance policies issued in electronic form.
Regulation(6) “e-proposal” or “electronic proposal” means a proposal form for an insurance policy filed in electronic form and the free consent of the prospect obtained in accordance with the guidelines issued from time to time.
Regulation 26(7) “e-insurance policy” or “electronic insurance policy” shall mean a digitally signed policy document evidencing the insurance contract issued to the policyholder by an insurer in an electronic form.
Regulation 26(10) “Insurance advertisement” means and includes any communication issued by insurers, insurance intermediaries, through any mode, related to an insurance product and intended to result in the eventual sale or solicitation of an insurance product from the members of the public, or which urges a prospect or a policyholder to purchase, a policy of insurance.
| REGULATION 3(c) OF IRDAI( INSURANCE ADVERTISEMENT AND DISCLOSURES) REGULATIONS, 2021 “Insurance advertisement” means and includes any communication issued through any mode or medium, directly or indirectly related to an insurance policy or product and intended to result in the eventual sale or solicitation of a policy or product from the members of the public or urges a prospect or a policyholder to purchase, renew, reinstate, increase, retain or modify a policy of insurance.
(c1) ―Invitation to inquire advertisement- means an insurance advertisement which highlights the basic features of insurance products issued in any mode or medium to generate interest or create a desire to inquire further about them. (c2) ―Invitation to contract advertisement- means an insurance advertisement containing the detailed information regarding the insurance products mainly to induce the public to purchase, renew, reinstate, increase, retain or modify a policy of insurance. |
Regulation 26(11) “Institutional advertisement” means an advertisement which is not intended to solicit the purchase of insurance policies, but only promotes the brand image of the insurers and/or its intermediaries or insurance intermediaries.
| REGULATION 3(d) OF IRDAI( INSURANCE ADVERTISEMENT AND DISCLOSURES) REGULATIONS, 2021 ―Institutional advertisement, means an advertisement of any nature which is not, either directly or indirectly, intended to solicit the insurance business, but only promotes the brand image of the insurers and/or its intermediaries and may contain the registered name, address, toll-free number, logo or trademark thereof. Advertisements issued in any mode or medium including those that highlight sponsorships fall under this category. |
Regulation (20) “Trade Logo” for the purpose of these regulations is a name or a mark, such as symbol or monogram or logo which uses the name of an insurer as an acronym for the purpose of promoting, canvassing and publicizing the insurer or the products and services offered.
REGULATION 27. ADVERTISEMENTS
(1) The information being advertised shall be fair and true and shall reflect potential risks within the products offered and shall not mislead or misrepresent the facts or features.
(2) Every insurer, while publishing advertisements, shall necessarily include its registered name along with its trade name or monogram or logo visible prominently.
(3) Every distribution channel shall publish advertisements only as soliciting insurance products offered by insurers and not give any impression in the advertisement, as if the products are offered by it directly.
(4) No insurer or distribution channel shall publish or cause to publish any misleading advertisement. No advertisement shall make any claim or display such information which:
(a) affects the ability of a prospect to identify and discern the benefits of insurance products.
(b) disguises or obscures terms and conditions of insurance product.
(c) makes claims beyond the ability of the policy to deliver beyond the reasonable expectation of performance.
(d) uses words or phrases such that it hides or underplays the risks inherent in the policy from the prospect.
(e) omits to disclose or discloses insufficiently the important exclusions, limitations and conditions of the policy.
(f) contains illegible text (including on account of font size) forming part of the advertisement, including a reference to conditions where applicable.
(g) contains false or fabricated facts, figures and features.
(5) All insurers and distribution channels shall ensure that mandatory disclosures as specified by these regulations and applicable circulars are clear, conspicuous and legible.
(6) All insurers and distribution channels shall ensure that static or interactive content posted by them on their social media platform or page complies with the provisions of these regulations and the circulars issued in this regard.
(7) All insurers shall ensure that advertisement activities that are conducted through their distribution channels are subject to adequate controls and oversight such that all such advertisements that pertain to the insurer or its products or performance are not unfair, deceptive or misleading.
(8) Every insurer and distribution channel shall ensure that they do not engage in any unfair trade practices.
REGULATION 28. Every advertisement must be approved by the insurer in writing prior to its issue if the advertisement is issued by.
(a) A distribution channel representing the insurer; or
(b) An insurance intermediary representing the customer if it relates to any insurance product.
| IRDAI( INSURANCE PRODUCTS) REGULATIONS, 2024
PRODUCT MANAGEMENT AND GOVERNANCE: REGULATION 6(1) BOARD APPROVED POLICIES AND PRODUCT MANAGEMENT COMMITTEE (PMC): a). Every insurer shall have in place Board approved policies covering all areas of product design, underwriting, advertisements and overall management of the insurance products. b). The Board constituted Product management committee shall be responsible for implementation of the Board approved policies and ensuring: i). adherence to principles of design and pricing of insurance products. ii). appropriateness of the product design for the target market. iii). regulatory compliance and recommending products for filing under File and use procedure, as applicable. iv). products falling under Use and file category are approved. v). periodical review of product performance, market conduct issues including grievances and taking up corrective actions, as may be necessary. vi). modification or withdrawal of the product, if required. vii). overall management of the insurance products. viii). maintenance of documentation of the decisions taken for each product for inspections of the Competent Authority. REGULATION 6(1)(c) All advertisements issued by the insurer and their distribution channels shall be approved through a Board approved advertisement committee of some of the Key Management Persons (KMPs) and one permanent invitee from PMC of the insurer. The constitution of this committee shall be as specified by the Competent Authority. The approvals may be granted by the committee considering the expectations that may get created from such advertisements and possible market conduct issues. These approvals shall be in accordance with the specified framework and the approvals given by the PMC on such products. |
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| IRDAI CIRCULAR NO. CIR. NO.
IRDAI/ACTL/CIR/PRO/207/10/2022 DATED 4TH OCTOBER 2022 BEARING SUBJECT CIRCULAR ON FILING OF PRODUCTS/RIDERS FOR LIFE INSURANCE BUSINESS. Para 5.2. The Board of insurers shall constitute a Product Management Committee (PMC), which shall have. i) Appointed Actuary, ii) Chief Risk Officer, iii) Chief Marketing/Distribution Officer, iv) Chief Technology Officer and v) Chief Compliance Officer of the insurer as members. In addition to the above, the insurer may include other members of its senior management in the PMC as members or as invitees. |
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| INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (INSURANCE ADVERTISEMENTS AND DISCLOSURE) (FIRST AMENDMENT) REGULATIONS, 2021 ,MAY 2023.
1. Each insurer shall constitute an advertisement committee reporting to the Product Management Committee. The advertisement committee shall have at least three members mandatorily from Marketing, Actuarial and Compliance functions of the insurer. 2. All the insurance advertisements hereafter shall be submitted to the advertisement committee. The advertisement committee shall examine the advertisements and make suitable recommendations to the Product Management Committee. 3. Product Management Committee shall be the final authority either to approve or reject the advertisements, after examining the recommendations of the advertisement committee. The Product Management Committee and advertisement committee shall be accountable and fully responsible for releasing the approved advertisements. 4. Product Management Committee shall ensure to maintain: a. a register of all advertisements including the details of filings, approved, rejected and withdrawn. b. a register of all advertisements approved, for the use of insurance agents and insurance intermediaries, including the details of filings, approved, rejected and withdrawn. c. the records for all the advertisements, as per the record retention policy of the insurer or at least three years from the date of withdrawal of the advertisement and shall be made available to the Authority as and when called for. 5. The insurer shall upload the advertisement on their website in the chronological order of URN within three days of releasing the approved advertisements. Insurers are advised to set up proper robust systems to upload advertisements on their website within three days of release. 6. The insurer has to set up the system mentioned in clause 5 above and is requested to send a confirmation email to the Authority informing the compliance on or before one week of releasing of this Circular. |
REGULATION 29. Compliance and Control of Advertisements Every insurer and distribution channel shall ensure that it establishes such internal controls, compliances and such other measures as may be specified.
REGULATION 55. TRADE LOGO An insurer using the trade logo shall comply with the guidelines specified in this regard from time to time.
REGULATION 56. POWERS TO ISSUE CIRCULAR, GUIDELINES AND DIRECTIONS The Competent Authority may issue circulars, guidelines and directions, if necessary, from time to time, relating to Part A and Part B of these regulations including, but not limited to, transitory provisions regarding implementation process of these regulations.
REGULATION 57. POWER TO REMOVE DIFFICULTIES AND ISSUE CLARIFICATIONS In order to remove any doubts or difficulties that may arise in the application or interpretation of any of the provisions of these regulations, the Competent Authority may issue appropriate clarifications or guidelines as and when deemed necessary.
REGULATION 58 – Repeals The Insurance Regulatory and Development Authority of India (Insurance Advertisements and Disclosure) Regulations, 2021.
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