An analysis of official data by Moneycontrol showed that misselling (unfair business practices) complaints are down 70 percent between 2014-2020.
Complaints related to unfair business practices (UFBP) received by the Insurance Regulatory and Development Authority of India (IRDAI) registered a 70 percent decline in six years from 1,45,129 complaints in 2014-15 to 43,444 in 2019-20, showing a downward trend, analysis of official data show.
The complaints relating to misselling of insurance policy are included under the broad category of UFBP. The percentage of UFBP complaints to total life insurance complaints received by IRDAI too have seen a significant decrease from 52 percent in 2014-15 to 26 percent in 2019-20. While the total complaints related to life insurance policies which had seen a fall until 2016-17, have picked up from 2017-18.
The declining trend in UFBP complaints is attributed to reviews and follow ups made by IRDAI of grievance redressal machineries of all life insurers, effective monitoring mechanisms, educating people on misselling and awareness campaigns, IRDAI’s report on Consumer Affairs 2017-19, highlights.
As many as 9,954 complaints have been filed between April and July (FY21) with respect to unfair business practices and misselling of insurance, MoneyControl reported on September 21, based on data given in Lok Sabha on September 19, 2020.
Under IRDAI (Protection of Policyholders’ Interests) Regulations, 2017, the regulatory body mandates “all insurers to have in place a board approved policy which shall contain steps to be taken to prevent mis-selling and unfair business practices at point of sale and service.”
“In case the insurer fails to resolve the complaint within 30 days of its receipt or the resolution provided by an insurer is not to the satisfaction of the complainant, he/she can approach the Insurance Ombudsman,” the government reply to the Parliament said in September.
As many as 39 complaints were pending for resolution as on July 31, out of which 22 were pending for less than 15 days and 17 for more than 15 days, our report had mentioned earlier.