India’s insurance regulating body, the Insurance Regulatory and Development Authority (IRDAI), has issued new regulations on insurance advertisements and disclosure to ensure that advertisements are relevant, fair and in simple language enabling informed decision making.
As per the new regulations, insurers must adhere to key measures, which include:
- Having a compliance officer, whose name and official position in the organisation shall be communicated to the Authority, and who shall be responsible to oversee the advertising programme;
- Establishing and maintaining a system of control over the content, form, and method of dissemination of all advertisements concerning its policies or products;
- Maintaining an advertising register at its corporate office which must include: (a) a specimen of every advertisement disseminated, or issued or a record of any broadcast or telecast, etc.; (b) a notation attached to each advertisement indicating the manner, extent of distribution and UIN number of any policy or product advertised;
- Maintaining a specimen of all advertisements for a minimum period of three years;
- Filing a copy of each advertisement with the Authority within seven days of its release;
- Filing a certificate of compliance stating that, to the best of its knowledge, advertisements disseminated during the preceding year have complied with the provisions of these regulations and the advertisement code;
- Following recognised standards of professional conduct as prescribed by the Advertisement Standards Council of India and discharge its functions in the interest of the policyholders.
Improving product transparency and customer retention
An ‘unfair or misleading’ advertisement has many classifications, among them: ‘makes claims beyond the ability of the policy to deliver or beyond the reasonable expectation of performance’; ‘uses words or phrases in a way that hides or underplays the risks inherent in the policy’; ‘omits to disclose or discloses insufficiently, important exclusions, limitations and conditions of the policy’; and ‘gives information in a misleading way’.
The IRDAI has been making several improvements in the region of late. Most recently, it established a panel of advisors for health insurance cover in the country. This latest move, which aims to improve product transparency for insurance customers touches on an important topic for the industry. Transparency has often been touted as a an integral factor to improving customer retention in travel insurance.