Your duly sign a cheque for the payment of the premium of your existing policy, handing it over to your agent well within time. A couple of months later you come to know that your premium was never paid. And not just that, you are also the ‘proud’ holder of a brand new policy–one you had never really bought..!
Unbelievable as it may sound, this is a scenario which routinely presents itself in the insurance sector as a biting reality. There has been a disturbing rise in the number of cases where unscrupulous representatives or / agents collect renewal payments. but use the cheques to sell fresh policies to unsuspecting customers.
Mis-selling is a concern we have been regularly raising and warning our readers against. This is just another facet that has raised its ugly head & need to be guarded against.
The issue has become grave enough for IRDA to actually plan an intervention and ensure such instances are not repeated. IRDA is reported to be considering a suggestion that renewal cheques should be made in favour of specific policy numbers to avoid such cheques being used for any other purpose except the payment of ththe premium.
At present, the regulations are unclear & unspecific. Insurers accept cheques made out to a specific policy number. But do not refuse those that are simply in favour of the company. Some advise policyholders to specify the policy number on the cheque while others do not. The result is a slew of such malpractices which not only leave a bunch of troubled consumers with unwanted policies. But also insurance companies plagued by dissatisfied consumers.
Both the regulator and the industry are trying to rectify the situation by introducing fresh measures. While IRDA contemplates new regulation, many insurers are also planning to make mentioning policy number on the cheque mandatory.
There are also proposals to have a welcome call whenever a new policy is purchased and let the consumer know if there is an unpaid premium of any previous policy.
Awareness & Education. !
While the regulations are contemplated & implemented, the chunk of responsibility to save themselves from the fraud lies with the consumers themselves. Awareness and education is the key.
The consumers should make sure that they always make the cheque stating their policy number. When buying a new policy, customers should mention their name, telephone number, email id and the name of the policy opted for on the back of the cheque.
Irrespective of what measures do or do not come into place, this is one sure shot way of saving yourself from this fraud.
Src: Economic Times
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