Relieving the pain

Nov 30 2012, 10:44 IST
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SummaryIrdas new norms on disclosures will help customers make informed choices as well as redress their grievances faster

To make disclosures by both life and non-life insurance companies more meaningful, the insurance regulator has put up a revised format that will have to be filled up by insurers on a quarterly basis, starting December 31.

The Insurance Regulatory and Development Authority (Irda), in a recent circular, said that absolute data released by companies were meaningless and did not lend themselves to proper comparison and analysis as the numbers involved were contingent upon several factors, such as age of the insurer, the size of the insurer, the number of policyholders and the number of claims registered.

Analysis of data relating to grievances becomes more meaningful when the grievances are correlated to policy servicing parameters or claims related parameters as may be the case, said the Irda circular.

Towards this objective, the regulator has revised forms L41 and NL41 where the insurers make their periodic disclosures to the public. Among other things, the insurers will now have to give a break-up of all complaints made by customers related to proposal, claim, policy, premium, refund, coverage, cover note and products.

Currently, companies make disclosures of complaints made by customers under heads like sales related, new business, policy servicing and claim servicing. Moreover, insurers will now have to make disclosures on duration-wise pending status, such as up to seven days, 7-15 days, 15-30 days, 30-90 days, 90 days and beyond.

Analysts say such detailed disclosures will make it easier for customers to do an analysis and go for an insurer that suits them the best.

In fact, in the exposure draft on standard products for unit-linked insurance products (Ulips), the regulator has made it mandatory for insurers to mention certain particulars in their brochures, such as investment strategies and risk control measures adopted by the insurer, and the changes in fundamentals like interest rates, tax rates, etc, affecting the investment portfolio. Companies have to make disclosures on composition of the fund debt and equity analysis within various classes of investment, investment portfolio details, sectoral exposure of the underlying funds and the ratings of investment made.

Apart from these, life insurance companies will have to furnish data to the regulator on a half-yearly basis (September and March) on switching options exercised by the policyholder, premium redirections exercised by the policyholders, partial withdrawals, top-up premium received and insurance cover multiple granted for each product separately for single premium and non-single premium contracts.

The insurer will have to

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