Changes Proposed to Insurance Advertisement Regulations : Daily Current Affairs

Changes Proposed to Insurance Advertisement Regulations

In a bid to protect consumers, regulator IRDAI has proposed to prohibit insurers from issuing advertisements that make claims which are beyond reasonable expectations of performance.

The unfair and misleading advertisements will include those which fail to clearly identify the product as insurance and describe benefits that do not match the policy provisions, the regulator said in the draft Insurance Regulatory and Development Authority of India (Insurance Advertisements and Disclosure) Regulations, 2020.
Some of the key changes proposed to the current regulations include modifying definition of advertisements and rationalization of certain other definitions, enlarging scope of the term ‘misleading advertisement’, and putting onus for enforcing compliance on advertisement endorsed by third parties on insurers for compliance.

The objective of the proposed regulation is to ensure that the insurers, intermediaries or insurance intermediaries adopt fair, honest and transparent practices while issuing advertisements, and avoid practices that tend to impair the confidence of the public.
Another objective of the proposed regulation is to ensure that the publicity material is relevant, fair and in simple language, enabling informed decision making.

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous, statutory body tasked with regulating and promoting the insurance and re-insurance industries in India.
It was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India.
The agency's headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001.
IRDAI is a 10-member body including the chairman, five full-time and four part-time members appointed by the government of India.

In 2013 the IRDAI attempted to raise the foreign direct investment (FDI) limit in the insurance sector to 49 percent from its current 26 percent. The FDI limit in the insurance sector was raised to 100 percent according to the budget 2019.

The future looks promising for the life insurance industry with several changes in regulatory framework which will lead to further change in the way the industry conducts its business and engages with its customers.
The overall insurance industry is expected to reach US$ 280 billion by 2020. Life insurance industry in the country is expected to increase by 14-15 per cent annually for the next three to five years.
Demographic factors such as growing middle class, young insurable population and growing awareness of the need for protection and retirement planning will support the growth of Indian life insurance.