IRDA limits scope of selling Ulips Over phone by distance insurance marketers

KOLKATA: Distance insurance marketers will not be allowed to sell non-single premium Ulips with annualised premiums of over 50,000 per year and single premium Ulips with premiums above 1 lakh per year, over telephone - voice as well as SMS. They will also not be able to sell any variable insurance product through such modes.

Irda has asked insurers to prepare a standard script for presentation of benefits, features and disclosures of insurance policies they sell over the distance marketing mode. It needs to be filed with and cleared by the regulator, before they start soliciting for such covers.

Insurers will also have to disclose the rate of commission available on the product in case the client asks for it.

A set of regulation released by the Insurance Regulatory & Development Authority on Wednesday stipulates that insurance policies sold by marketers through any means of communication other than in person will have to adhere to these rules. These will be effective from October 1.

Reliance Life Insurance president Moloy Ghosh said: "Off late, there has been a number of complaints that policies are being sold on false promises. Such guidelines were required. It will now reduce such incidents."

"In all instances where a policy is issued without obtaining a proposal in physical form, insurers shall forward a verbal transcript of the voice/electronic record of the queries raised and answers thereto on the basis of which the policy has been underwritten, along with the policy bond," the Irda rule stipulates.