INSURANCE
Make sure insurance ads are clear, fair and not misleading: Irdai to insurers
Oct-22-2019

The Insurance Regulatory and Development Authority of India (Irdai) has asked insurers to ensure that advertisements of insurance products are clear and do not convey a fabricated sense of security to prospective customers. The Irdai has issued a circular on 'insurance advertisements' that outlines has prescribed dos and don'ts for insurance companies to comply with.

The Irdai circular stated that all insurance advertisements should ensure that communications are clear, fair and not misleading whatever be the mode of communication. They should use material and design (including paper size, colour, font type and font size, tone and volume) to present the information legibly and in an accessible manner. The mandatory disclosures should be in the same language as that of the whole advertisement. Names of insurance products or benefits must not use terms or phrases that convey a fabricated sense of security. In case of communications through internet, an insurer should ensure that the recipients/viewers have the opportunity to view the full text of the relevant key features; terms and conditions; any other applicable risk information required by these guidelines and they shall not be hidden away in the body of the text.

Insurance regulator said that the success of insurance sales communication depends on public confidence and the faith they repose in the insurers, when they receive a communication from companies promoting their products. As it may be difficult for the public to understand and evaluate the inherent details in the various insurance products, it is of paramount importance that the publicity material is relevant, fair and in simple language enabling informed decision making about whether or not to buy a specific insurance product.

The circular also said all licensed entities soliciting insurance business should mention their identity and contact details. Any person found to be guilty of misleading the prospect on any insurance product will be liable for regulatory actions.

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