Under new codes of conduct for insurance agents prescribed by the Insurance Regulatory and Development Authority of India (IRDAI), aimed at enhancing transparency, insurance agents will have to reveal to those clients who ask, the amount of commission they will be earning from the client’s premium, and also tell their clients candidly about the chances of their policies being accepted or rejected.

The new guidelines under the Regulations for Appointment of Insurance Agents stipulates that agents should not abide by the rates, advantages and terms and conditions stipulated by the insurance companies, and cannot offer extras, or make changes on their own. Also, an agent cannot demand or receive a share of the proceeds from the beneficiary under an insurance contract or force a policyholder to terminate an existing policy and buy a new one from him within a period of three years from taking a policy.

The agents should also produce their identity cards / appointment letters to establish their credentials for the clients’ benefit. And to safeguard the companies, the agents have been mandated by the newly-announced regulations to disclose life-threatening habits of their clients, such as smoking, which will affect underwriting.

“The code promotes transparency in disclosures at the point of sale and provides the customer the right to demand information relevant for the purpose of decision making. The provision on blacklisting agents and having a central database ensures that a mechanism to verify the background of the agent is in place to protect the interests of the customers,” according to C L Baradhwaj, senior vice-president (compliance) & chief risk officer at Bharti AXA Life Insurance.

Meanwhile, it is important to know that IRDAI maintains a centralised list of blacklisted agents. Customers can check if an agent is blacklisted by entering the agent’s name, licence number (if available), type of insurance, name of the insurance company, state and district, etc. If blacklisted agents are found to be operating, consumers can complain to the IRDAI.

Source: http://wap.business-standard.com

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