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Saturday, February 4, 2012

Life insurance sale must be need based, says IRDA


The sale of life insurance policies are set to become more scientific soon.
The life insurers should ensure a need-based sale of life insurance products by their direct sales personnel, the Insurance Regulatory and Development Authority said in the draft guidelines on product matrix released on Tuesday.
“It is important and necessary for insurers to have in place a suitability index (or a prospect product matrix) that can serve as a self governing tool to assess the quality of sale,” Mr J. Hari Narayan, Chairman, IRDA said.
As per the draft guidelines, an insurer or a distributor must make reasonable efforts to obtain a consumer's suitability information prior to making a recommendation to the consumer on a product.
Suitability information means information should include factors such as age, annual income and financial resources used for funding the purchase of the life insurance product besides risk tolerance.
The regulator is planning to bring the product matrix (or need-based sale) from April 1, 2012.
Source : http://www.thehindubusinessline.com

1 comment:

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