New Delhi, Sept. 23 -- Regulator Irdai on Wednesday proposed prohibiting 'dark patterns' on insurance websites, including practices that require customers to provide personal details to access product features and pricing information.
As part of wide-ranging reforms aimed at making insurance distribution more transparent and customer-centric, Irdai has issued a consultation paper on 'Recalibrating Economics of Insurance Distribution', setting out a comprehensive framework of reforms covering insurance distribution, its structure, expenses, commissions, market conduct, transparency and leveraging digital infrastructure.
Insurance Regulatory and Development Authority of India (Irdai) proposes to replace the existing complex and fragmented architecture with three broad categories of distribution entities: Insurance Distribution Entities (IDEs), Insurance Distribution Persons (IDPs) and Market Infrastructure Institutions (MIIs).
The Expense of Management (EoM) framework is proposed to be recalibrated through lower limits with a phased glide path, the paper said.
For life insurers, the EoM limit would move to a company-level basis linked to Gross Direct Premium Income (GDPI), with the limit proposed at 15 within two years and 12.5 within five years.
For general insurers, the basis would shift from gross written premium (GWP) to domestic GDPI, with the EoM limit reducing from 30 per cent of GWP to 20 per cent of GDPI within five years, also through progressive annual reductions.
"The proposed reduction in EoM is intended to lower the overall cost of insurance, thereby expanding the risk pool available in general insurance and enhancing returns to policyholders in life savings products," said the paper. Irdai has invited comments till October 25.
The consultation paper proposes tracking dark patterns and making relevant performance information available to strengthen market discipline.
Published by HT Digital Content Services with permission from Millennium Post.