The growing concern over mis-selling of insurance products by banks has prompted the introduction of the Bima Sugam platform, a digital initiative by the Insurance Regulatory and Development Authority of India (IRDAI). IRDAI Chairman Debasish Panda, addressing the issue at SBI’s Annual Business & Economic Conclave, emphasized that banks should prioritize their core lending activities and ensure customers are not coerced into buying unsuitable insurance products.
This comes in line with Finance Minister Nirmala Sitharaman’s call for a more responsible approach to bancassurance practices.
Mis-Selling Concerns in Bancassurance
Finance Minister’s Remarks
IRDAI Chairman’s View
Features of Bima Sugam
Objective
Advantages
Summary/Static | Details |
Why in the news? | Bima Sugam platform will solve insurance mis-selling |
Concern Raised | Mis-selling and force-selling of insurance products by banks, leading to increased costs for customers. |
Finance Minister’s Remarks | – Banks should focus on core banking activities, not insurance sales. – Mis-selling contributes indirectly to the cost of borrowing for customers. |
IRDAI Chairman’s Statement | – Bima Sugam platform can help address mis-selling by offering transparency in the insurance process. – Banks must offer customers multiple product options and avoid force-selling |
Bima Sugam Platform Features | – A digital platform showcasing insurance products. – Integrated with Aadhaar, UPI, and the account aggregator framework. – Allows for buying, selling, and servicing of insurance policies transparently. |
Call for Collaboration | – All stakeholders (banks, insurers, regulators) must collaborate to restore customer trust in the system. |
Objective of the Platform | – To empower customers with better access to insurance products and ensure ethical sales practices |
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