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New ASCI guidelines likely for insurance companies soon

The entity will look at implementing the standards set down by the insurance watchdog, by the second half of 2010

The Advertising Standards Council of India (ASCI) has plans to include guidelines for the insurance and financial sectors soon. Considering that there have been many complaints filed against insurance advertisements, the council aims at modifying the guidelines further. Alan Joseph Collaco, secretary general of ASCI said, “We will do it (the modifications) once we get a consensus from insurance companies, probably around the second half of 2010. At present, the percentage of complaints received (concerning insurance companies) is 10% (of the total number of complaints being received). However, more insurance companies are advertising with every passing day.”

However, the implementation isn’t likely to happen immediately but is on the cards. Mr Collaco further added that the complaints received by the council are on these lines: “In one advertisement, fixed deposits are compared rather unfairly with insurance. In another advertisement, insurance is shown as a route to fulfil your child’s dreams.”

There are some minimum standards advertisers and brands need to adhere to, which is in compliance with the IRDA (Insurance Advertisements and Disclosure) Regulations, 2000 referred to as ‘Advertisement Regulations’ and the code of conduct formulated by ASCI and any other regulations as applicable.

Clyton Fernandes, a research analyst (banking and financial services) with Anand Rathi Financial Services, believes that it is a positive move for the insurance industry, “It is good and more about awareness, more than anything else. At least it will make insurance and financial companies more cautious; people are often mislead about products. This might not be good news for financial companies in the beginning as it will impact their profit margins, but it will be fruitful for customers as they will get a better perspective about different products.”

SBI Life Insurance is in favour of this move initiated by the advertising council. Chandramohan Mehra, head (Brand and Communications), SBI Life Insurance told Moneylife, “Any move that is in the interest of the customers will always be welcomed. The basic ingredient to keep the customers’ trust intact is to initiate honest communication.”

In the month of March 2010, the council had implemented specific guidelines on the auto and food & beverage sectors. Mr Collaco had said, “ASCI realises that cutthroat competition among products and the need for uniqueness can sometimes lead to senseless exaggeration and depiction of unsafe practices.”

ASCI is a self-regulatory voluntary union of the advertising industry that plays the role of a body that receives complaints from consumers and the industry with the help of its Consumer Complaints Council (CCC), against advertisements which are considered false, misleading, indecent, illegal, leading to unsafe practices, or unfair to competition. ASCI had upheld complaints against six advertisements in February. These advertisements include brands like Dabur Chyawan Junior, Shanti Badam Amla Hair Oil, Maruti SX4, IMS CAT Approach Program, Tata AIG Insurance, and Mahindra Flyte Power Scooter. More documents on complaints are expected in the near future.
 

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COMMENTS

John Matthew

7 years ago

This is a good move. I was executive secretary of the ASCI and I appreciate this move on their part.

Sanjiv Kapoor

7 years ago

Good Move but needs to wegh the Pros and Cons

Sanjiv Kapoor

7 years ago

Good Move but needs to wegh the Pros and Cons

Roopsingh

7 years ago

REALLY VERY GOOD MOVE-if it is implemented properly

IRDA adds only three insurance brokers in 2009

Only three insurance broker licenses were added in 2009 while no licenses have been granted this year yet

According to data available on the Insurance Regulatory & Development Authority (IRDA) website, no new insurance broker licenses have been granted this year. In the year 2009, only three new licenses were awarded.

“The process is time-consuming. It’s not a matter of not issuing licenses but it’s a matter of not renewing them. In fact, IRDA has gone on record to say that brokers are not responding fast enough. New applications have probably trickled down to nothing because the viability of a direct broker has come into serious difficulty,” said Fali A Poncha, chairman, International Reinsurance and Insurance Consultancy and Broking Services.

More than 50 broker licenses have already expired and are still under renewal scrutiny. Some of these insurance broker licenses had been cancelled, barred, or suspended by IRDA in September 2009. Seven licenses were given an extension of six months—which have already expired between June-November 2009—while six were given an extension of one year out of which four have already expired and two are due to expire in the next few months as on 30 September 2009. A total of 15 licenses have been cancelled by the regulator since 2005, out of which five were cancelled in the year 2008, one in 2009, five in 2007, three in 2006, and one in 2005.

Pritam Ins. Brokers Pvt Ltd, a Delhi-based direct broker, was refused renewal of its license which expired on 18 August 2008.

“The effort of procuring and servicing the business has been exhaustive. There is a 60%-90% discount range and the earnings have frozen on the basis of premium. It’s not an attractive proposition for people to invest in infrastructure and become a broker. There’s a huge reduction in premium rate across the board. They are renewing, but the process takes a lot of time in the procedure, inquiries, and answers from brokers etc,” added Mr Poncha.

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COMMENTS

SANJAY JAIN

5 years ago

we want to take the broker licence from irda , kindly provide us the detail procedure for further process.

Pankaj Bhaiya

6 years ago

How do i get an insurance Broker License From IRDA India

V K Shrivastava

7 years ago

Moneylife Moderator , don't allow such lengthy posting.only summary required.

anil

7 years ago

S, Sree Ramulu, S/o Shri S. Venkiah Petitioner
Vs Respondent/- 1. Union of India, Through its Secretary Ministry of Finance 2. IRDA, Parishram Bhavan, Basheer Bagh, Hyderabad- 50004 3. IIRM Hyderabad
RE: Public Interest Petition
Petition under Article 226 of constitution of India challenging the ultra vires activities by the Insurance Regulatory and Development Authority and violation of Articles 14,19 and 21 of the constitution of India.
I , S, Sree Ramulu, S/o Shri S. Venkiah do hereby solemnly affirm and state as under:
1. I am a senior citizen of India and am a social activist as such I am swearing this public interest petition.
2. The 2nd Respondent which is a statutory body created by an act of parliament (IRDA act 1999) with a view to regulate and develop the insurance industry and to protect the interest of the policy holder. It is submitted that the said respondent is engaging in activities which by law it is not authorized to enter and spending public money activities it is not authorized to do. 3.. It is most humbly submitted that in the year 2002 IRDA has come up with an institute in most whimsical and arbitrary manner and against the interest of the public of India at large. IRDA has without any authority transferred the huge amount running into 10 crores to the above institute for the reasons best known to them and that too without the permission of the Ministry of Finance to which they are answerable. 4.. It is submitted that the above amount was transferred in a very mysterious manner and not through any negotiable instrument like cheque so as to make the transaction more secretive. It is submitted that the IRDA in order to tackle possible problem that may come up with CAG has brought a serious officer on deputation from CAG who has been made Administrator of the institute named as IIRM. 5. That the CAG has objected to the said transfer and also a Lok Sabha stared question number 422 on 22/8/2003 was asked on the above issue ( Annexure I). IRDA in itets annual report 2003-2004 page 156 (Annexure II) has shamefully admitted the mistake however public monies continue to be used against the law of the land. It is submitted that the IRDA can not undertake such transfer of funds to any such institute under the IRDA act,1999 6. That the 3rd respondent is charging an amount of 1.5 lacs using the umbrella of IRDA which is a statutory body and the apex regulator for the insurance industry in India. Thus IRDA is engaging in blessing one particular institute by supplying not only monies, logistics but also providing its staff as faculty to IIRM which activities is not only ultra vires but also highly arbitrary and against the Constitution of India. Copy of the Web advertisement of 3rd respondent is enclosed and marked Annexure P-1 7. That the 2nd respondent is using its authority and funds for the purposes not approved by the Insurance Act 1938 and the IRDA act 1999 and engaging in activities which are discriminatory and arbitrary and hit by article 14,19 and 21 of the Constitution of India. It is submitted that sec. 16 of the IRDA Act- 1999 deals with the Constitution of IRDA funds and specifies the purpose for which the funds and its monies can be used. The Section 16(2) is reproduced below.
The fund shall be applied for meeting- A) The salaries, allowances and other remuneration of the members, officers and employees of the authority B) The other expenses of the authority in connection with the discharge of its function and for the purpose of this Act. As such the said transfer of the funds to creating and running of the IIRM is not approved by the above act and the said transfer is also against the interest of the public since the public monies are being used for engaging in activities which are not warranted. In the process genuine providers of insurance education and training are also being affected due to the umbrella and patronage of the insurance regulator to IIRM and therefore the acts are also discriminatory and arbitrary in nature.
8. It is humbly submitted that the regulator is collecting heavy fees from the insurance companies which are in turn collecting the monies from the innocent public and the said monies are used to make personal gains and applied for useless purposes not provided by the very act that has created the Authority thus the action of the regulator is not only illegal but ultra vires the Insurance Regulatory and Development Authority Act, 1999 and needs to be declared illegal by this Apex Court to protect the monies of lacs of innocent public whose monies cannot be allowed to be used by the respondent in such whimsical, arbitrary and illegal manner and it is prayed that this Hon'ble Court as a custodian of the rights and interests of the Citizens of India may be pleased to interfere and put a stop to the working of the respondent No 3 and the illegal use of monies by the Respondent No.2.
9. That the 2nd respondent is blessing the 3rd respondent in every possible manner and deriving under table benefits for its important officials. The 2nd respondent has used 3rd respondent to provide education and employment to the children of its executive director and the chief accounts officer etc. Thus the above public monies are being transferred and used by the IRDA for securing personal advantage like creating special jobs for the children of the high officials of IRDA .
10. It is submitted that since in spite the noting in the CAG, The Lok Sabha Question and the Annual report 2003-04 the respondent no. 2 has chosen not to initiate any steps to correct and stop its illegal actions and further the respondent No. 1 has also not taken the pain of making enquiry and closing down the respondent No. 3 institute and has failed to stop the respondent No. 2 from embezzlement of public funds. It is therefore necessary that this Hon'ble Court may take serious note of this burning issue and pass necessary directions to pass signals to the other organizations as well that they cannot take the law for granted.
11. It is humbly submitted that the respondent No. 2 has created a training college called IIRM - Institute of Insurance & Risk Management i.e the respondent No 3 mostly to provide competition to a National Insurance Academy, centre of excellence in Insurance professional education established by the primary effort of Government of India and its Public Sector Insurers. It may be noted that the IRDA Regulations under the IRDA Act 1999 and the Insurance Act, 1938 mandates statutory training and retraining for license and renewal of Brokers and Agents as intermediaries . As per extant regulation National Insurance Academy is the examining body for Indian Insurance Brokers.
It is unique in the regulatory system in the world to find the respondent No. 3 is even beating drums about the illegality by saying that Chairman of respondent No.2 signs its educational certificates, particularly when respondent No. 3 seems to have corporate constitution with a Managing Director. This is a matter which should have drawn attention of Federal Government of Indian Republic - the question is fundamental for debate; should regulator be a player in the market but even the respondent No. 1 has turned a blind eye to the illegality.
12. It is most humbly submitted that it is a primary principle that 'no man can be a judge in his own case' which principle is also belittled by the respondent No.2. The Chairman Respondent No. 2 has approved the respondent No. 3 to conduct training and examination of brokers in order to make them eligible to get licence from the Respondent 2 the insurance regulator and the same Chairman of Respondent No. 2 is also the signatory of the certificates of the examining institute i.e respondent No 3. Is this not evidence of the malfunctioning of the regulator and its illegal activities. Is it not proof enough that the respondent No. 2 has created respondent No. 3 not only illegally but also using it to make personal gains at the cost of the public monies.
There is no equally efficacious remedy available to protect the interest of the citizens and therefore this Hon'ble Court may be please to interfere and pass suitable directions and declare the above activities ultra vires and against public interest.
It is most humbly prayed that this Hon'ble Court may please admit this Public Interest Litigation and
a) stay the operations of respondent No.3 immediately b) punish the Chairman and other senior officers of the respondent No.2 for indulging in corruption, malpractices and embezzlement of public monies. c) direct respondent No.2 to recover the monies illegally transferred to respondent No.3 and stop it from using the respondent No.3 for making personal gains d) direct the respondent NO.1 to enquire and shut down the respondent No. 3 and to keep control on the activities of respondent No.2 to prevent misuse of public monies. e) Pass any order/writ as the Hon'ble Court may deem fit in the circumstance and facts placed before it.

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