In yet another step towards policyholders’ protection, the Insurance Regulatory & Development Authority (Irda) has come up with stringent rules which that every insurer has to enter into an agreement with their agent/corporate agent for a term of not less than three years.
Thus, a customer may be saved of any confusion of being denied services from a corporate agent or an agency all of a sudden and hence switch insurers.
And every insurer has to make adequate arrangements for servicing the policies earlier serviced or being serviced by the agent who wishes to leave the insurer.
A senior Irda official said, “We were getting quite a few complaints from policyholders that servicing standards were falling as the agent changed insurers. As a result, the policyholder was also forced to change the insurer and thus losing the benefits of the existing policy.”
Mayank Sharma, a policyholder, who has a unit linked and a traditional policy, with a leading private insurance company, is relieved. “Recently my corporate agent, a bank, told me that it is no longer an agent for the insurance company whose policy I have. This is a real problem as servicing the policy is a big issue. The corporate agent asked me also to switch to another insurance company, which is not proper.”
The Irda has asked all insurers to ensure that the list of all the serviced policyholders along with the policy details, contact details, which are available with the agent, are verified by the insurer and confirmed in writing by the outgoing agent and are recorded with the insurer. Officials for future servicing of “policies of such policyholders” have to be identified.
Perhaps the greatest respite here is that the Irda making it categorical that mere provision of call centre facilities is inadequate. “Insurers and their agents shall inform in writing to all such policyholders about the arrangements made to service their policies which shall include contact details of the officials of the insurance company who would be providing the services in all such matters pursuant to such a transfer or change in agency”, Irda chairman J Hari Narayan said.
No insurer can issue a no-objection certificate to their agents leaving the organisation to tie up with another insurer, unless the policyholder has been informed. The Irda has also stated that no insurance company can release renewal commission of agents who have left them before completing 5 years of service.
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