Transcript Regulators Role In

CUSTOMER SERVICE REGULATORY VIEW
By
PC James
Executive Director, IRDA
ECONOMIC DEVELOPMENT & GROWTH OF
NON LIFE INSURANCE PRODUCTS
Higher From protection of physical
Mature Markets
Spending assets to protection of income
and financial assetsAccident, Health and Disability
on
insurance for individuals •
Insurance
• credit and financial
Liability insurance for
per head
insurance for businesses
individuals •
• Liability insurance for businesses
Motor
Emerging Markets
• Marine and other insurance
(comprehensive)
• Business interruption
trade related
•
( consequential loss) insurance
transport insurance
• Commercial property
Underdeveloped Markets insurance
• property insurance for large gov’t projects
•Motor insurance (3rd party liability)
Level of Economic Development (GDP per head)
CHALLENGING ENVIRONMENT
Regulatory Mission,
Competition,
International Benchmarks,
Growing
customer awareness,
expectations
Rapid rate of
technology
advancements
& innovation
Convergence of
Institutions,
Instruments,
Intermediaries
Insurance
Industry
New Business
Models
,
Disintermediation
and
Reintermediation
Changing
Pricing scenario /
De-tariffing
Increasing Product-Price
Complexity and Flexibility,
ART, Derivatives
Mission of IRDA
To protect the interests of the
policyholders, to regulate, promote and
ensure orderly growth of the insurance
industry and for matters connected
therewith or incidental thereto.
FUNDAMENTALS OF AN IDEAL
REGULATORY ENVIRONMENT
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PROTECTION OF THE CONSUMER
PROMOTION OF THE INDUSTRY
COMPETITIVE NEUTRALITY
TRANSPARENCY
COST EFFECTIVENESS
ACCOUNTABILITY
FLEXIBILITY
PROTECTION
• ESTABLISH A REGULATORY
FRAMEWORK TO PROVIDE ADEQUATE
PROTECTION TO CONSUMERS
• PREVENT /ENFORCE SUCH
REGULATIONS
• INSTIL PUBLIC CONFIDENCE
PROMOTION
Provide a favourable climate for product
development/intermediation and healthy
growth of insurance
A reliable and stable market
Freedom of entrepreneurial
spirit
* Balance between degree of prudential
regulation and degree of freedom
*
COMPETITIVE NEUTRALITY
*
Level playing field for all participants
* Minimal entry and exit barriers
* No undue restrictions on institutions or
products
* Well – defined rules of game
SOURCES OF REGULATIONS
*
Laws / Statutes
- Government
* Formal Regulations
- Regulations
• Non-formal Regulations
- Guidelines
• Self-regulation
• Internal Regulation
- Industry
- Corporate Governance
LAW
• MAKES GENERAL FRAMEWORK FOR
THE INDUSTRY
EG. INSURANCE ACT 1938
IRDA ACT 1999
REGULATOR
• Issues specific rules & regulations
• Responsibility for enforcement
JUDICIARY
*
Decide on suits
* Give interpretations
* Decide on the legality of an insurance
practice
INSURANCE POLICY – FILE & USE
- policy to confirm to requirements
imposed by statute/regulation
- policy to be consistent, not ambiguous,
misleading, unfair or inequitable
- the benefits provided are reasonable in
relation to the premium charged
DESIRABLE REQUIREMENTS
•
•
•
•
Standardisation of clauses
Simplification of terms & coverages
Full disclosure
Avoidance of misleading/confusing
clauses
• Definitions of terms
• List of Policy Prohibitions including list
of permissible exclusions
SELLING METHODS
• LICENSING OF AGENTS /
INTERMEDIARIES
•
•
•
•
AGENTS
CORPORATE AGENTS
BACASSURANCE
BROKERS
• SURVEYORS
• TPAS
• ADVERTISING
•
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POLICYHOLDER PROTECTION
REGULATIONS
POINT OF SALE – PROSPECTUS
PROVIDE ALL MATERIAL INFORM ATION TO DECIDE THE BEST COVER
FOLLOW CODE OF CONDUCT
PROPOSAL OF INSURANCE
GRIEVANCE REDRESSAL PROCEEDURE
MATTERS TO BE STATED IN POLICY
CLAIMS PROCEEDURE
POLICYHOLDER SERVICING
DUTY OF INSURED
INSURANCE OMBUDSMAN
• INSURANCE OMBUDSMAN EXISTS FOR
SPEEDY, CONVENIENT REDRESSAL OF
GRIEVANCES OF INSURED THAT TOO AT
MINIMUM COSTS.
• OMBUDSMAN CAN DEAL WITH PERSONAL
LINES CLAIMS (INCLUDING HEALTH
INSURANCE) UP TO RS.20 LACS.
GRIEVANCE ISSUE
PROCESSES
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1.
2.
3.
SETTLING INDIVIDUAL GRIEVANCES
ANALYSIS OF GRIEVANCES
CATEGORISING GRIEVANCES
DELAY
STRUCTURAL/SERVICE ISSUES
POLICY/ CONTRACT ISSUES
REMOVING ROOT CAUSES
• ANALYSING ROOT CAUSES
• STUDY OF RULINGS, JUDGEMENTS
• EMPOWERED LEVELS TO TAKE
CORRECTIVE ACTION
• REVIEW RESULTS
• CHANGE OF PRACTICES, SYSTEMS,
PRODUCTS
IRDA GRIEVANCE CELL
DEPARTMENT WISE NON LIFE COMPLAINTS
RECEIVED(APR'05-MAR'06)
OMI
15%
HEALTH
48%
OTHERS
4%
FIRE MARINE
6%
2%
MOTOR
25%
IRDA GRIEVANCE CELL
SOURCEWISE COMPLAINTS RECEIVED
(APR'04-MAR'05)
Company
13%
Individuals
87%
IRDA GRIEVANCE CELL
NATUREWISE CATEGORISATION OF COMPLAINTS RECEIVED
DURING APR'05-MAR'06
NON SETTLEMENT / DELAY IN
SETTLEMENT OF CLAIM
4%
27%
REPUDIATION / PARTIAL
SETTLEMENT OF CLAIM
52%
17%
POLICY ISSUES
OTHER REASONS
IRDA’S CONCERNS
PROHIBITED SALES PRACTICES
AND UNETHICAL INTERMEDIATION
MISLEADING ADVERTISEMENTS
FAILURE TO PROVIDE PROPER
DISCLOSURES
INSENSITIVITY TO CONSUMER WELFARE
DELAYS
THE WAY FORWARD
1.
2.
3.
4.
5.
6.
7.
TIMELINESS. DECREASE PROCESS DELAYS
NEED FOR CLARITY & QUALITY IN
COMMUNICATION
CREATE PROCEDURES FOR QUICK
DECISION MAKING
CONVEY WRITTEN DECISIONS & IF
NEGATIVE WITH REASONS
RECORD REASONS IN FILE
INFORM AVAILABILITY OF EXTERNAL
REMEDIES IF NOT RESOLVED INTERNALLY.
USE PROCEDURES THAT INCREASE
CONSUMER ACCESS
THANK YOU