The sale of life insurance policies are set to become more scientific
soon.
The life insurers should ensure a need-based sale of life insurance
products by their direct sales personnel, the Insurance Regulatory and
Development Authority said in the draft guidelines on product matrix released
on Tuesday.
“It is important and necessary for insurers to have in place a
suitability index (or a prospect product matrix) that can serve as a self
governing tool to assess the quality of sale,” Mr J. Hari Narayan, Chairman,
IRDA said.
As per the draft guidelines, an insurer or a distributor must make
reasonable efforts to obtain a consumer's suitability information prior to
making a recommendation to the consumer on a product.
Suitability information means information should include factors such as
age, annual income and financial resources used for funding the purchase of the
life insurance product besides risk tolerance.
The regulator is planning to bring the product matrix (or need-based
sale) from April 1, 2012.
Sources The Business line
Courtsey: P K Patra
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