Concerned over subdued growth in the insurance sector, Finance Minister P Chidambaram today asked the insurance companies to refrain from mis-selling and devise simple products for people to boost growth in the sector.
"In my view, the reason why insurance is stumbling in India is because of mis-selling of products and complex products.
"If you want to sell insurance to India, you must sell simple products and must make it absolutely clear to agents and other officers that they should not mis-sell," Chidambaram said.
He was inaugurating new brand of PNB Metlife following Punjab National Bank's acquisition of a 30 per cent stake in the company.
The Finance Minister said India is one of most under-insured countries in the world with the penetration of less than 4 per cent of the GDP.
"I think if you keep these two guidelines—simple products and no mis-selling--insurance will make great rise in the next few years," he said, adding, the insurance companies should come out with such products which people can understand.
Drawing comparison, the Finance Minister said "while the demand for banking services and spread of banking services is extremely fast paced, the demand for insurance products, growth of insurance companies is quite tepid."