On 18th June, 2010, the Authority had put up a draft in the nature of a Discussion Paper on the need to prescribe standards and procedures for Needs Analysis for sale of life insurance policies. Needs Analysis by the intermediaries and the insurance companies is necessary before effecting the sale of a life insurance policy in order to ensure that the product that is proposed to be sold is suitable for the prospect and meets his or her needs.
It is proposed to mandate carrying out Needs Analysis for life insurance policies . Insurers shall, in terms of Regulation 4 (1) of the IRDA Regulations for Protection of Policyholders’ Interests, 2002 adopt a standard Proposal cum Needs Analysis form.
It is also proposed to issue guidelines to life insurance companies to develop and implement a Prospect Product Matrix that will serve as a tool to assess whether or not the proposed sale is based on the Needs Analysis. This shall currently be made applicable to all life insurance policies (Traditional, ULIPs, Pension and Health) sold as individual policies.
The Draft Guidelines(Attached as zip file)
, along with an illustration of a Prospect Product Matrix (Annexure B)(Attached as zip file)
and the Standard Proposal cum Needs Analysis form (Annexure A) (Attached as zip file)
are attached. Stakeholders are requested to send in their comments on the draft guidelines as soon as possible but definitely on or before 29th February, 2012.
Feedback may be sent to ypriyab [at] irda [dot] gov [dot] in
J. HARI NARAYAN