The government is shaking things up in the insurance world to better protect people from being misled and to encourage more folks to get insured. For instance, they’re extending the ‘free-look period’ for policies and introducing a ‘composite insurance license.’ This means if you buy a policy and find something off about it, you can return it.
Additionally, with this new license, various types of insurance services will be available under one roof. This should help cut down on shady selling practices and bring more people into the insurance fold. Reports suggest this is a crucial move to tackle the issue of unfair policy sales. One of the key changes is extending the ‘free-look period’ from one month to a full year after you receive your policy.
This gives policyholders a chance to thoroughly review the terms and conditions after purchase. If they decide it’s not for them, they can cancel it. The government is also looking into the ‘composite insurance license,’ which would allow insurance companies to offer all kinds of products, including life and health insurance, under one umbrella. Plus, there’s a plan to ensure that only trained agents can sell these insurance products.
In a recent press conference, Financial Services Secretary M. Nagaraju shared that these changes in insurance laws are essential for allowing 100% foreign direct investment (FDI) in the sector. He mentioned that internal discussions are nearly wrapped up. Alongside the law changes, there will also be updates to rules regarding investments, profit returns, and the management of insurance companies, which will kick in once Parliament gives the green light.
Nagaraju mentioned that the government is implementing significant reforms in the insurance sector to ensure that a larger segment of the population can access insurance coverage. Finance Minister Nirmala Sitharaman has already announced that foreign companies will be permitted to invest up to 100%. These reforms also include allowing the sale of various types of insurance under a single license. All these changes are part of the initiatives outlined by the Finance Minister.
You will be protected from fraud
Nagaraju pointed out that banks often pressure customers into purchasing insurance, which can lead to improper sales practices. Small business owners and home buyers frequently find themselves compelled to buy insurance. To address this issue, the government has introduced a one-year ‘free-look period’ and has instructed insurance companies to adhere to this policy.
Nagaraju stated, “If someone wishes to return their policy, they should have that option.” He emphasized that insurance companies have been asked to reach out to customers to prevent the mis-selling of policies. He also noted that private companies have been encouraged to provide thorough information to customers genuinely interested in insurance. Additionally, banks and other financial institutions have been directed to ensure that only trained insurance agents are authorized to sell policies. These measures aim to minimize complaints.