‘Insurance Misselling a Significant Concern’, Says Irdai

India’s insurance regulator has flagged misselling and unfair business practices as a growing concern, calling for corrective action by insurers to protect policyholders and strengthen trust in the sector.

Key Findings

• The Insurance Regulatory and Development Authority of India (IRDAI) has stated that insurance misselling remains a significant concern.
• Insurers have been advised to conduct a root-cause analysis to identify and address the reasons behind such practices.

What Is Insurance Misselling?

• Selling insurance products without adequate disclosure of:
  • Terms and conditions
  • Costs and benefits
  • Product suitability for the customer
• Often involves pushing unsuitable or complex policies to meet sales targets.

Government’s Stand

• The Ministry of Finance has repeatedly cautioned banks and insurers against misselling.
• Emphasis has been placed on:
  • Corporate governance best practices
  • Ethical sales behaviour
  • Protecting consumer interests