More regulatory reforms for insurance sector to spur growth: IRDA chief

As per Insurance Regulatory and Development Authority (IRDA) Chairman T. S. Vijayan, the insurance industry will undergo another round of regulatory reforms, particularly focused on distribution channel, to instill growth.

As per him, IRDA is focusing on bank channels and sub-broker level distribution and citizen service centres (CSCs) for better growth prospects. The insurance penetration is expected to rise substantially in the years to come.  The insurance industry was going to witness major changes in the coming days. Several insurance firms would be listed on stock exchanges and open up abundant opportunities in the segment.

IRDA is concerned about the product design and miss-selling aims to make sure that products approved by IRDA should have least chances of miss-selling.

What is Misselling?

Misselling is an intentional and ethically questionable practice of selling of products or services in circumstances where the contract is either misrepresented, or the product/service is unsuitable for the customer’s needs. For example, selling life insurance to someone with no dependents is regarded as misselling. In this case, the investor would arguably have little need for whole life insurance and, therefore, an insurance salesperson describing the product as something the investor urgently needed to protect his or her assets in the event of death could be considered a case of misselling.