Home
/ Insuremagic Exclusives
Interview of Saugata Gupta, Chief-Marketing, ICICI Prudential
Life Insurance Company
What is the recently introduced 'Code of Conduct
all about? Has your company already enforced it? If not,
when do you plan to enforce it?
The ‘Life Insurance Self Regulation Standards of Conduct
and Sound Practice’ aims to protect consumers’ interests
by giving them the necessary information pertaining to their
policy in an accurate and understandable manner.
This includes giving out benefit illustrations that meet
specific guidelines such as projected rates of return, keeping
them updated about the status of their policy, etc. The
code comes into force for all life insurance companies from
January 1, 2004.
What kind of changes will it bring about in selling
of insurance products?
The code of conduct sets out two rates of return – 6% and
10% - both of which all companies must use for their benefit
illustrations. This standardization across companies will
enable customers to make a better comparison of products
of different companies and select one that suits them best.
In what ways will the Code of Conduct benefit the
customer?
The greater amount of information given to a customer will
give him/her a clearer idea of the features and conditions
of the policy, what he will put into the policy, the benefits
that accrue to him. Standardization of the rates of return
in the benefit illustrations will facilitate easier comparisons
of different products. Other aspects, like informing a customer
when the policy proposal has been accepted, depending on
the medical tests, will ensure that customers are more aware
of their rights and responsibilities.
Because riders cannot compulsorily be sold as part of the
product, customers are in a better position to select only
what they require and pay for the same. All these steps
ultimately result in a more aware, happier customer.
How difficult will it be to market risk products
now with the code of conduct making it mandatory to project
earnings that will have to be based on standardized rates
of return laid down by the Life Insurance Council?
We firmly believe that the customer must have choice and
transparency when it comes to selecting his/her life insurance
products, and this code is a step in that direction. Our
benefit illustrations have long since featured two different
rates of return to give the customer a better idea of the
possible earnings on his policy, and we will soon be bringing
these rates in line with those that are being prescribed
by the Life Insurance Council. In fact, our benefit illustrations
have so far proven to be an effective sales tool.
Also illustrations projected by insurers will now
have to project two scenarios. How far will this step benefit/affect
insurance sales?
Because life insurance products are long-term in nature,
it is difficult to predict the rates of return over the
period of the policy. Hence life insurance companies will
project two scenarios of investment returns to for the customer,
so that they have a clearer idea of what the likely returns
for their policy are, depending on how the markets and economy
performs. This increased disclosure gives greater confidence
and information to the customer.
Archives
| Back
| Top | Home
|
|
