Fifty percent of total grievances lodged against private life insurers in 2022-23 were complaints about unfair business practices, according to the IRDAI’s annual report for FY2022-23. The report was released on the Insurance Regulatory and Development Authority of India (IRDAI) website on December 27, 2023.
Total number of grievances lodged against public sector life insurers in 2022-23 was much higher at 81,494 as against 45,884 grievances lodged against private sector life insurers. However, the share of unfair business practices (UFBP) grievances in the total grievances was much higher in case of private sector at 23,129 which is 50.4% of 45,884. As against this, the percentage of UFBP grievances in total grievances against public sector life insurers in India was only 3.65% (2978) in 2022-23, as per the annual report.
Also read:Life insurance companies paid over Rs 42,000 crore as commissions in FY 2022-23: Irdai report
The total number of grievances lodged against all life insurers in India decreased from 1,54,826 in 2021-22 to 1,27,378 in 2022-23, as per the report. Grievances against private sector life insurers increased from 40,624 in 2021-22 to 45,884 in 2022-23 whereas those against public sector life insurers fell from 1,14,202 to 81,494. Here, it is worth mentioning that the share of public sector life insurers in the life insurance industry as such is higher than that of the private sector as of now.
Grievances on Unfair Business Practices registered against life insurers
Source: IRDAI annual report
The report also states that in order to provide a channel to receive grievances against insurers, IRDAI has set up a Grievance Call Centre. It has also put in place the Bima Bharosa portal as an online system for grievance management that is not only a gateway for registering and tracking grievances online but also acts as an industrywide grievance repository for to monitor IRDAI disposal of grievances by insurers. The total number of grievances registered against life insurers declined by about 17.73 per cent in 2022-23 from previous year and the ratio of total Unfair Business Practices grievances to new policies issued remained at 0.09 per cent in 2022-23.
Insurers have been advised to take up the issue of mis-selling seriously by doing a root cause analysis to identify the major causes, says the report. Some of them are: ascertain suitability of product, place controls on various channels based on the vulnerability of the channel and have a strategy on dealing with complaints of mis-selling.
The definitive way of reducing mis-selling is to make the members of the public aware of the concept of insurance, kinds of insurance policies, risks covered, benefits offered, exclusions, and conditions etc. This is sought to be achieved through various efforts of financial education to improve financial literacy, the report adds.
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