IRDA is an insurance regulator and regulates the insurance sector in India. It protects your interests (policyholders) and looks into issues regarding settlement of your claim as well as surrender value of your policy. If you are subject to mis-selling by insurance agents or the Insurance Companies do not listen to your grievances then IRDA comes into play.
But how is it that I have received such calls from IRDA?
- The popular belief is that this is the handiwork of insurance agents who have not met their targets.
A number of prominent insurers in the private sector have filed a complaint with the economic offenses wing as such a malpractice would affect their business and investigations are going on.
So how is this done.....
- Insurance agents collect phone/mobile numbers of existing insurance policy holders which they have easy access to maybe from the Insurance Company database.
- A call is made by these insurance agents saying that they represent IRDA (actually not true) and they ask if you have any grievances with your insurance policies.
- If you have been mis-sold an insurance policy by an insurance Company you could have grievances with claims, bonus or with surrender of your insurance policy. This makes you an easy target.
- These agents tell you that they have the power to get your money which you have invested in the life insurance policy back or can get your claim settled if you have such a grievance.
- They then ask for confidential data such as your policy number, policy holder and nominee details stating that they will help you get the money back.
- They gain your confidence and convince you that they will look into your grievance as a priority.
- The insurance agents then use this data and collect all other details such as premiums you have paid, fund value of your Ulip policy, any charges/expenses deducted on your insurance policy from the Company database of the insurer which they can easily access.
- These agents then call you back giving you an accurate description of your policy such as charges deducted as commissions for agents, fund value if it is a Ulip or how much you will get if you surrender the policy.
- You believe that since the agents have so much information on your policy they must really be from IRDA or the grievance cell of the IRDA called IGMS (Integrated Grievance Management System) and this establishes their genuine credentials.
What offer do they make.....
- These insurance agents (falsely representing IRDA or IGMS) then tell you that if you surrender the insurance policy through them you will not only get the full refund of the surrender value but also all deductions charged by the Insurance Company and commissions to agents will be refunded to you in full.
- These agents then tell you that if you opt to receive a surrender value on your life insurance policy from the insurance Company directly you will get only the surrender value of the policy after surrender charges are deducted.
- Any greedy person would opt for the refund on the policy through the IRDA as he would get a higher amount.
- These fake IRDA agents then ask you to purchase an insurance policy whose premiums are of similar value to the insurance policy which you are surrendering.
- This life insurance policy is of a different Company from the policy you are surrendering. The life insurance policy must be purchased only through these agents falsely representing IRDA.
- These agents state that you will get a refund 45 days after you subscribe/take up the new life insurance policy.
- These agents state that in order to protect the insurance sector in the country IRDA and IGMS regard each grievance as a top priority and the entire refund process is handled by IRDA itself.
How do the agents gain from this.....
- The false insurance agents ask you to make a premium payment to a bank account as specified by them towards the premium of the new life insurance policy.
- Once this amount is paid towards the new life insurance you would neither get a refund nor a new life insurance policy.....You just lose the money you pay as a premium.....
- If you insist on paying the premium amounts of the new insurance policy only to the insurance Company through a cheque then these agents substitute this amount as a premium payment of some other policy holder and collect cash from these policy holders in return. This cash is of course unaccounted for.
- If you ask for a copy of the complaint made to the IRDA these agents simply register a complaint in your name to the IGMS and give you the reference number of the complaint.
IRDA issues a caution
- IRDA has issued a caution stating that it or its representatives do not sell insurance or financial products or give bonuses on life insurance policies.
This is displayed prominently on TV and in theaters and you must have come across them.
IRDA does not involve, directly or through any representative, in sale of any kind of insurance or financial products. IRDA does not announce any bonus for policyholders or insurers. Any person making any kind of transaction with such individuals/agents who are claiming themselves to be associated with or part of IRDA, will be doing the same at his / her own risk.