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Insurance sector regulator IRDA has started examining the bancassurance model of insurance penetration as there have been a few instances of misselling of policies by banks.
“A panel was set up by the IRDA to look into the bancassurance model. The panel has already submitted its report,” IRDA member (F&I), Mr R.K. Nair, said.
Mr Nair said that some banks had resorted to forced selling of policies while advancing loans to customers.
Typically, the policies get lapsed due to non-continuance by the customer after the first premium is paid, leading to forfeiture of the money by the insurance company, Mr Nair said at the Indian Chamber of Commerce here today.
He said that IRDA was concerned over the practice, for which a panel had been set up. “Selling should be need based and not forced,” he said. Better regulatory practices were needed to deal with lapsed cases, he said.
On the IPO guidelines for non-life insurance companies, he said the rules would be similar to those for life companies, but disclosures would be different.
“The nature of disclosures are under finalisation,” he said.
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