Insurers to go the extra mile to curb mis-selling

KOLKATA: Insurance companies have a tough job on hand to keep their image clean. While the Insurance Regulatory and Development Authority (IRDA) may be busy framing policies to check instances of mis-selling, life insurers companies are going the extra bit to keep thousands of their financial advisors, a.k.a. agents, from mis-selling.

Mis-selling of policies can be of different forms, the most common being making tall promises on returns on a unit-linked insurance plans (Ulips) on the basis of the previous stock market returns.  Sometimes, even traditional policies are hard-sold, riding on the wave of unit-linked policies.  

While most life companies said that their battery of agents were the best and did not resort to mis-selling, the actual picture at times has not been so.

DNA Money spoke to some insurers on the steps being taken to curb this. Sunil Kakar, chief financial officer, Max New York Life said, “It becomes difficult to track each and every agent individually, but we have a feedback mechanism in place, which helps us know if there are any cases of mis-selling or potential mis-selling. The customer focus is also inculcated in our agent advisors through rigorous training, which helps building awareness about ethical selling.”

Sam Ghosh, CEO, Bajaj Allianz Life, said, “We have over 2 lakh agents and have been stringent on any such instances of wrong selling. The company has also taken action against such advisors and will not stop to terminate them for misconduct.”

Certain companies like Tata AIG Life have preventive measures for preventing such mis-selling.

“An advisor will be permitted to sell a linked product only if he or she has sold regular term, health and endowment products. The company introduced Ulip certification for agents even before it was suggested by IRDA. The training also emphasises the right practices for selling Ulips,” S Bharat, senior vice-president, Tata AIG Life, said.

New companies like Reliance Life have also been aggressive on insurance sales. According to P Nandagopal, CEO, Reliance Life Insurance, “Being a client-focused company, Reliance Life intends to tackle the challenge of mis-selling through a series of short-term and long-term steps such as mystery shopping, client welcome call and verification, continuous agency training and data analytics to see any suspicious trends.”

With a clear indication from IRDA on curbing all instances of mis-selling and customers getting aware of such incidents, life insurance companies may have to correct any such misgivings and concentrate on upping individual market share through ethical selling.