IRDA (Insurance Advertisements and Disclosure) Regulations, 2000

C INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY NOTIHCA TION New Delr.i, tlic l4!h July. 2()00 In,'llr:lnce Rc~ulat<>r~· :ind tk.,·clnpmcnl Autimrit) (]nsurnnce Ad,•ertiscmcnts and Disclo,mrc) Rtgul~tions. WIiii I'. l\'n. lRD,VReg/7/20011.- lu exercise ot 111.,; powers contcrrcd hv seer ion 2<, nft:1, lnsurnncc Regulator) anJ Developme:m t\ulllonty Act, ! 999 t 41 of I <JlJ91. the ALllho.ny rn consultation with the lnsurance Advisory L'omminee. hereby makes tile ri>llowill!?, rcgulatrons, n:m,ely:- 1. Short title and commencement - ( l) The~c rcgula1io11s may be t:alle<l the l;rsurance Regulatory and DL·v..:lormt'fil At:thority (_lnsurancc A<lv1c:rt1,emcnts aml D,sclosurt') Regul,11 ions. ~OU(), (2J Thc-y ~hall ~0111c into force on the <late oftbcir publication m the Onicial C:vt::tte. lkrinirions - Lrnlt.:,~ rhe com(·Xt 01herw1se reqLnres, - Pl "Au,hornv" means Ille Insurance Rcg1.ilatory and Development Aurbonly cstab):sltc<l t:ndcr sub-sccoon ( I l of section J o[TI1c Insurance Reg,1l;1to1y and Developml'nt Au1t;ority i\c1. 1999 (-ii nr 19<l9); (hl "insurance atlv..:r11se111em" m~ai1s and includes any co111munication directly or 111dir"ctly related to .i policy and rnlcncled to rcsuit rn the C\'1.mtual sale ors1.1lic1ta1ion of a rol1cv from the membt:rs !)f the µublic.-. and ~hall include all fom1s of pnntt:d illld puhlish.:d 111:.uermb 01 any 111:11..:rial using the pnnt and or l'icctrn:1ic mc<liurn for public con1111umca1ior\ such as: l I I j) iii) iv) \') vi I vii) viii) JX) '<) ~I/ XII) XII I/ 1,ewspapcrs, rn~gaztrrts and sales talks; billbuanls. boar<ltng~. p,rr1-cls; rn<l10. te!cv1s1on. website, e-mail. por1ab: representations by mtermcdi aries: k:allets; Jescrip11ve literntum c1rc11lars; sales aids flyers; illustral!m:s i'orm lc11ers; telephone sol1c11at1011s; busine~s c:Hd&; vi<lens; laxes; or J11~ other commurncntJon with a prospect or a policyholder that urges him to rurchase, rl!nc.'\\', 111crcru;e. rc·tai11. or modify a policy of insurance. Dxnlww11nn: rhe following materials shall not be co11.;1dcred Lo be an advertisement provided the)• are not 11sctl lo induce the purchase. increase, modificat1on, or retention oJ a policy of insurance:- (i} materials u,ed by an msurnnce company w11hi11 us 0\\11 nrgan1zation and not meant for distribution to the public; 7 I! I 8 iv) (CJ (d) THE GAZETrE OF INDlA : EXTRAORDINARY [PART 111-Ssc. ~] commu111cauons with policyholders other than materials urging them to purchase. increase. mollify surrender or retain a policy; materials used solely for the !raining, recruitment. a11d education of an insurer's personnel, intem1cdiaries. counsc::lors, and solicitors, provided they are not used 10 induce 1l1c public to purchase, increase. modify. or retain a policy of insurance any general announcement senl by a. group polrcyholder to members of the eligible group that a policy has been written or arranged. '' i111em1cdiary or insurance intem,ediary includes insurance brokers, reinsurance brokers. insurance consultants. surveyors and loss assessors. or any otller person rcpresentrng ur assisting an insurer m one or more of the following : i) soliciting. negotiating, procuring. or effectuating an insurance contract or a renewal or an rnsurance conlract; ii) iii) iv) V) vi) vii) viii) IX) x) disseminating 111fiim1ation relating to coverage or rates; forwardmg an 111surance applicauon; servicing and delivering an insu.rance policy or contract; inspecting a risk: sen i Ilg a rate: investigating or assessing a clairn or loss; transaci111g a 111ancr after the effectuation of a contract; or rcprescnring or assisLing an insllJ'Cr or other person in any olhcr manner in the transactton of insurance with respect to a sub,1cc1 of insurance n:s1dent. located or 10 be perfonned in lndia. ~ervicing a policy or contract. "unfair or misleading advertisement" will mean and include any advcrtisemenr: (i) that fails to clearly idemify the product as insurance: ii) nwkcs claims beyond the ability of the policy 10 deliver or beyond the reasonable expcctatton of perfonnanee; 1111 describes b<:nefils that do not match the policy provisions; 11scs words or phrases in a wny which hides or mrrum,zes rhe costs of 1he ltazar<l 111surcJ agmnst or tlic risks inherent 111 the policy: lllllllS lu disclose or discloses i11suflicien1ly. imporlan1 exclusions. lt1111ta11ons mid conditions of the contract; gives 1nfonnation in a misleading way; illustrales f111ure bcnelits on assumptrons wluch are 1101 realistic nor realisable in the light of the rnsurcr's current performance; "here the benclits are not guaranteed, does not explicitly say so as pro111111cntly as the benefits are stated or says so in a manner or fom1 that i; could rt:nwin unnoticccl 11nplies a group or other relationship like sponsorship. affi liatron or approval. 1l1a1 does 1101 exist; 111akcs unfair or incomplete comparisons with products which arc not comparable or disparages competitors. (t:) "prospect" 111eans any panv that enters or proposes lo enter into an insurance cu11trnc1 directly, or through an insurance intem1ediary. Words and expressions used and not defined in lhese regulations hur detincu in the Insurance Ac!. 1 '>38 ( 4 of 1938). or 11Tc Life Insurance Curporation Act. 1956 (31 of 1956) - '1ml ~ ~ : 3,jti)qj(VJ or the General lnsutance Business Nationalisation) Act, 1972 (57 of 1972), or Insurance Regulatory and Development Authority Act, 1999 ( 41 of 1999) shall have the meanings respectively assigned to them 111 those Acts or the mies as the case may be. 3. Compliance and control - (I) Every i □surer or intermediary or insurance agent shaU - (i) have a compliance officer, whose name and official posiiion in the organisation shall be communicated to the Authority, and he shall be responsible to oversee the advcrti~ing programme: (ii) establish and maintain a system of control over the content, form. and method of disse111111mion of all advertisements concerning its policies. (iii) maintain an advertising register at its corporate office which must include: (a) a specimen of every advertisement disseminated, or issued or a record of any broadcast or telecast. etc.: {b) a notation attached to each advertisement indicating the manner. extent of distribution and form number of any policy advertised, and (1v) maimain a srec1men of all advertisements for a minimum period of three years. (v)' file a copy of each advertisement with the Authority as soon as it is first issued. together with infonnanon: (a) an identifying number for the advertisement: tb) the form number(s) of the policy(ies) advertised and when the protluct/s were approved by the Authority; (c) a description of the advert1semem and how II is used. (ti) the mc1hotl or media used fordisscmmation of the advertisement. \ vi) lilc a certificate or compliance with their annual statement stating that, lo the best of Its knowledge. advcrusemems disseminated by the insurer or by its intenned1arics during tJ1e preceding year have complied with the provisions of lbc;;e regulations and the advertisement code as stat(;ld in regulation l2. (2) The advertisement reg1s1cr shall be subject to inspection and review by the Authorily for comcnt. comcxt. pro1111nencc and posiuon or required disclosures. omissions of required infonna1ion. etc. 4 Changes in advertisement - (I) Any change in an advertisement would be considered a new adverl.isemem. (2) All tbc prov1,ions of reg ulauon 3 shall appCy 11111/atis 11w1<111dis to an advertisement rclt:rrcd to in sub regulaiion (i). (3) The J\uthonty shall b<.: infom1ed ai the lime of filing the advertisement the extcnl of change the original advcniscmcnt 5 Insurance company advertisements - ( I ) Every insurance company shall be required to rrommently disclose in 1he advcniscment and thaL part or the advcrrisemenl that is required to be returned to the company or insurance imem1ediary or insurance agent by a prospect or an insured the full p.miculars or tbc insurance company, and not merely any trade name or monogram or logo. 9 I!!!!!! I TiiE GAZETTE OF INDIA: EXTRAORDINARY IPAllT llJ-S~c. 41 (2) Whore benefits are more than bnefly described, the fonn number of the policy and the type of coverage shall be <l,sclose<l fully. 6. Advertisements by insurance agents - (I) Every advenisement by an insurance agent that affects an insurer must be approved by the i risurer in writing pnor to its issue; {'.2) It shall be the rcspousibili!y oflhe insurer whik granting such approval to ensure that all advcrtise1m:nts th:u penain to the company or its products or pcrfonnancc comply with these regulations anJ arc not decepti\·e or misleading. Ftn!a1w1um.· A11 agcm shall 1101 be required to obtain written approval of the company prior to issue fur: (i) thosl! ad\ ,-r1 i,.::ments developed by the insurer and provided to U1e agents; generic :1dvcr1,scmc111s limited to inform~tion like the agent's name. logo, address. and phom: number; and advcniscmc111s lha1 co11s1st only of simple ,tnd correctstatcments describing the av;1ilability .if" lines of insurance. references to ~xrcriencc. service and qualifications of ;lg<.;nb. hut 11iak111g no reference to specific policies. benefits, costs or insurers. 7. i\dvutiwments h~• insurance intermediaries- Only properly licensed mtennediaries 111.iy advertise o: ,,u!iu1 1n~unmc1;; tl\rough advertisements. 8 Advcrtisinl( 011 tht' Internee - ( I) Every 111surer or mtermediary's web site or po11al shall (i) include disclosun: statements which outline 1he site's specific policies vis-a-vis the privacy of pers,)11al 1nfo1111ation ft1r 1he protection of both their own businesses and the consumers they sen·c. (ii} displa:, 1l1cir rcg1s1rauon/ license numbers on their web sites. (2) For the ~•urposcs or lhese 1egulalio11s. except where othcnvise specifically excluded or restricted. no ro, 111 vr polic:: 01herll'ise perm:ssible for use shall be deemed invalid or impem11ss1bk i r sud1 form <'r policy :1ccurately reflects the tntentions of the parties in ,uch fimn or policy a~ published ctec1ro111cally or tran$111itt.:d dcclronicaJly between panics. '>. Identity of adverti~er Every :1tlvc•11iscment for insurance shall (i) state ckw-ly and unequi\ ocally that insurance ,s the subject matter of the solicitation; and (ii) state: the full rcgislc1cd name of the insurer/ intermediary/ insurance agent. 10. Endorscm(~nts and otl;c1· thii-d-rany involvement - (l) A third pany. group or assoc1a11on sh.Ill 1101: (i) tlistrih111e 11H,mna11011 about an msurance policy, intcm1ediary or insurer on its letterhead. (ii) allow an insurance 1n1enncdiary or insurer to distribute information about an insurance policy. msurance or insurance company on its letterhead. 'I!!! I 'lR\'I ;-;;i ~ : ~ (iii) distribute i11formation about an individual msurancc policy, or about an intermediary ur msurcr in 11s envelopes, unless- n) 1110 tlmd µarty is rrov1d111g only a distribution sen>ice for the insurance advc111scnwn1 anci 1s not 11self soliciting the coverage, and h1 the msurnnce 1nfonna11on 1s a riece separate from any mher information distrihutcd by the 1lHrd party and clearly indicates its origin. (i\') rc.cnmmcnd that 11's members purchase specific insurance products. (v) imply 1hal a persr>n 11111st beco1nc a member of it's organization in order to purchase 1hc policy. 11 (v1) imply that a purchaser of a policy hy becoming a member of a limitc:J group of pcrso11s shall receive srccial adva111ages from the 111surcr not provided for 111 the policy 1'r011dbtl that a tlmd pany. J!rnup or association may: 11) cndor,;e :111 111s11r:111ce t:ompany or insurance intermediary's product anJ provide truthful statc111cn1s. quotes. ~nd testi111on1aJs cndorstng the insurance products lo the insurance company tor use 111 the company's advertisements, so long as the l:rnguage <locs 11,11 ,,,111·..:y directly or indirectly a rccommendatio11 that members uf 1he organ1sa1111n purchase the prnd11c1s. (ii) prt)\'iue an 1nsurancl' company with infonnation about its membership aitd collect cnmpcnsation b::iseci upon sales tor that in!orrnation. 11. Procedurl' for action in c:ist of complaint - ( I) If an advertisement is not in :H.:cordancc w11h I hcsc FCJ!11lat1ons the 1\uth11rity may take action in one or more of' the fr>llowing w:1v~: (1) issue: a letter lo 1hc atl\'cn1ser scck111g information within a specific 1i111e. not he111g more than Len nays from the date of issue of the leltcr; (1i) direct tl1e adveniser to correct or modify the advertisement already issued 111 ,1 manner suggested hy tile Au1hority with a stipulation that the com.•.cted or 111od1fied ;1tlvcnisement shall receive the same type of puhlic11y as the 011e sought 10 be corrected or modified; (iii) d1rcc1 the advertiser tu disc-0minuc the advertisement forthwith; (1\') any 01hc1 ~1tt1011 deemed lit by the Authonty, keeping in 11ew the ,·1rcumsta11ces of the case, to ensure that the inten:sts or Lhe public are prot,,cted. The: :idvcniscr may seek addnional time from the ,~uthority to contply with tlie directions JttstiJ'y111g the reasons therefor. The Authority, may, however. refuse to grant extension of time if it feels that the adve11iser is seeking time only to delay Lil~ mullcrs. Any f:iilurc on tl1e purt of the adveniscr 10 comply w1Lh the directions of the Authonty may entail 1he Authority 10 take st1ch action as deemed necessary including l\:vy of pc11,,1ty. 12. Adherence to advertisement code - E,·e:-y insurer or intermediary shall follow n:cog.111scd sumdards of professional conduct .as prescribe;d by the Advertisement Standards Council or!ndia (ASC'll and discharge its functions in the interest of'the policyholders. 12 THE GAZETTE OF INDIA : EXTRAORDINARY [PART ill-SEC. 41 13. Stalu1'ory warnine - (I) Every proposal for an insurance product shall carry the l'ollow111g ,11pulat1on as prescribed in section 41 of the Insurance Act. 1938 (4 of J<nsi:- "No pers\ln shall allow or offer to allow, either directly or mdirectly. as an inducement to any person to take out or renew or continue an insurance in respect of any kind of nsk relating 10 lives nr prop.:ny in India. any rebate of the whole or pan of the commission payable ur any rebat.: of the premium sho\\ n on the policy. nor shall any person taking out or renewing or co111111u111,; a policy accept ::my rebate. except such rebate as may be allowed in accordm1ce witll th<' ruhlished prospectus or tables of the insurer." 12) 11- any rerson fo ils to comply with sub regulation (I) ;,bovc, ht: shall be liable to payment or .i line which may ~xtrnd to rupees five hundred. N. RANGACHARY. Chairperson I No. ADVT.-3/4/Exty/161/2000) Printed by the ~fan:i_ger, Ot>Vt of lndfa Press, Ring Ro.id. Mayapuri, >:ew D::lhi-1 J0064 :md l'ublis.hed by lhe Controller or Puhhcation.s. tk1J1i• I IOOS4- ZOl'JO I! I 0 0