Check On Sale Of Insurance

Complaints about insurance mis-selling come up mostly when a claim is rejected or the policyholder doesn't get what he thinks he bought the policy for

- Narayan Krishnamurthy

There is a common perception that insurance agents mis-sell insurance policies by not clearly explaining the policy benefits or limitations. Complaints have been rampant since the sector opened up to the private sector over two decades ago. Every once in a few years, numerous forums would take up this issue with the insurance regulator or even the finance ministry. The most recent episode occurred when the secretary, Union ministry of consumer affairs, wrote a letter to the secretary, financial services in the Union ministry of finance, detailing issues around mis-selling of insurance.

There is no doubt that the number of complaints regarding insurance claims being rejected has gone up with the department of consumer affairs. Policyholders have knocked the doors of the department after making attempts to reconcile claims with insurance companies and the insurance ombudsman, resulting in no favourable solution. It is easy to blame the insurance agents when the policy claim is declined and this appears to be one more such instance. The issue has found prominence because the consumer affairs secretary has highlighted that the root cause of the disputes lies in inadequate communication.