Insurance Regulatory and Development Authority (IRDAI) has asked insurers to make sure that advertisements of insurance products are clear and do not contain any misleading information of fabricated sense of security. The regulator prescribed the dos and don'ts for insurance companies to comply with in a circular. Any person found to be guilty of misleading the prospect on any insurance product will be liable for regulatory actions, it added.
The circular stated that all "communications are clear, fair and not misleading whatever be the mode of communication". It also added that information should be presented legibly. IRDAI also said material and design (including paper size, colour, font type and font size, tone and volume) used must present the information in an accessible manner.
The IRDAI circular further elaborated that mandatory disclosures must be in the same language as the entire advertisement. "Names of insurance products or benefits" must not use terms or phrases that convey a fabricated sense of security, the circular said.
It further said that in case of communications through internet, an "insurer should ensure that the recipients/viewers have the opportunity to view the full text of the relevant key features; terms and conditions; any other applicable risk information...they shall not be hidden away in the body of the text".
IRDAI said the success of insurance sales communication depends on public confidence and the faith they repose in the insurers, when they receive a communication from companies promoting their products.
"As it may be difficult for the public to understand and evaluate the inherent details in the various insurance products, it is of paramount importance that the publicity material is relevant, fair and in simple language enabling informed decision making about whether or not to buy a specific insurance product," it said.
The circular also said all licensed entities soliciting insurance business should mention their identity and contact details.