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CUSTOMER SERVICE -REGULATORY VIEW

CUSTOMER SERVICE -REGULATORY VIEW. By PC James Executive Director, IRDA. ECONOMIC DEVELOPMENT & GROWTH OF NON LIFE INSURANCE PRODUCTS. From protection of physical assets to protection of income and financial assets. Higher Spending on Insurance per head. Mature Markets.

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CUSTOMER SERVICE -REGULATORY VIEW

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  1. CUSTOMER SERVICE -REGULATORY VIEW By PC James Executive Director, IRDA

  2. ECONOMIC DEVELOPMENT & GROWTH OF NON LIFE INSURANCE PRODUCTS From protection of physical assets to protection of income and financial assets Higher Spending on Insurance per head Mature Markets Accident, Health and Disability insurance for individuals • • credit and financial insurance for businesses Liability insurance for individuals • • Liability insurance for businesses Motor insurance (comprehensive) • Emerging Markets • Marine and other trade related transport insurance • Business interruption ( consequential loss) insurance • Commercial property insurance Underdeveloped Markets •property insurance for large gov’t projects •Motor insurance (3rd party liability) Level of Economic Development (GDP per head)

  3. CHALLENGING ENVIRONMENT Convergence of Institutions, Instruments, Intermediaries Regulatory Mission, Competition, International Benchmarks, , Disintermediation and Reintermediation Growing customer awareness, expectations Changing Pricing scenario / De-tariffing Insurance Industry Rapid rate of technology advancements & innovation Increasing Product-Price Complexity and Flexibility, ART, Derivatives New Business Models

  4. 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.

  5. FUNDAMENTALS OF AN IDEAL REGULATORY ENVIRONMENT • PROTECTION OF THE CONSUMER • PROMOTION OF THE INDUSTRY • COMPETITIVE NEUTRALITY • TRANSPARENCY • COST EFFECTIVENESS • ACCOUNTABILITY • FLEXIBILITY

  6. PROTECTION • ESTABLISH A REGULATORY FRAMEWORK TO PROVIDE ADEQUATE PROTECTION TO CONSUMERS • PREVENT /ENFORCE SUCH REGULATIONS • INSTIL PUBLIC CONFIDENCE

  7. 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

  8. 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

  9. SOURCES OF REGULATIONS * Laws / Statutes - Government * Formal Regulations - Regulations • Non-formal Regulations - Guidelines • Self-regulation - Industry • Internal Regulation - Corporate Governance

  10. LAW • MAKES GENERAL FRAMEWORK FOR THE INDUSTRY EG. INSURANCE ACT 1938 IRDA ACT 1999 REGULATOR • Issues specific rules & regulations • Responsibility for enforcement

  11. JUDICIARY * Decide on suits * Give interpretations * Decide on the legality of an insurance practice

  12. 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

  13. 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

  14. SELLING METHODS • LICENSING OF AGENTS / INTERMEDIARIES • AGENTS • CORPORATE AGENTS • BACASSURANCE • BROKERS • SURVEYORS • TPAS • ADVERTISING

  15. 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

  16. 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.

  17. GRIEVANCE ISSUE PROCESSES • SETTLING INDIVIDUAL GRIEVANCES • ANALYSIS OF GRIEVANCES • CATEGORISING GRIEVANCES • DELAY • STRUCTURAL/SERVICE ISSUES • POLICY/ CONTRACT ISSUES

  18. REMOVING ROOT CAUSES • ANALYSING ROOT CAUSES • STUDY OF RULINGS, JUDGEMENTS • EMPOWERED LEVELS TO TAKE CORRECTIVE ACTION • REVIEW RESULTS • CHANGE OF PRACTICES, SYSTEMS, PRODUCTS

  19. IRDA GRIEVANCE CELL

  20. IRDA GRIEVANCE CELL

  21. IRDA GRIEVANCE CELL

  22. IRDA’S CONCERNS PROHIBITED SALES PRACTICES AND UNETHICAL INTERMEDIATION MISLEADING ADVERTISEMENTS FAILURE TO PROVIDE PROPER DISCLOSURES INSENSITIVITY TO CONSUMER WELFARE DELAYS

  23. THE WAY FORWARD • 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

  24. THANK YOU

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