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IRDA Issues New Guidelines

To safeguard insurance policyholders from fraudulent agents

Insurance Regulatory and Development Authority (IRDA) of India has issued new guidelines – reported The Hindu Businessline. One of the major issues that policyholders face is that when agents shift from one insurer to the other, they have to fend for themselves. This often leads to policyholders switching to another issuer, resulting in a loss of benifits on the existing policy.

Reportedly, the new guidelines to be followed by insurers, are framed to overcome these issues related to the servicing of policies. Accordingly, any change should be informed to the policyholders, before a No Objection Certificate (NOC) is issued to the agent leaving the firm.

According to the circular issued, the agreement between the agent and the insurer must be for atleast three years. The responsibility of servicing the current policies, including verification of details of the policyholders, would lie with the insurer. Agent and the insurer should also provide contact details of the company officials. Further, the insurer must maintain a dedicated helpline for six months after granting the NOC, reported the newspaper.

Sameer Bali, partner, Advisory Services, Ernst & Young, said: “IRDA has always been aware of the problem of orphan policies. Here, the provisions have been made explicit and greater onus has been cast on the insurance companies to make adequate provisions and inform the policyholders,” quoted the daily.