Code of Conduct for Insurance Sales Person (ISP) and Financial Service Executives (FSE)

Every ISP holding a valid certificate shall adhere to the code of conduct specified below:

(i) Every ISP shall. -

(a) identify himself and the Insurance Marketing Firm of whom he is an ISP;

(b) disclose his certificate particulars to the prospect on demand;

(c) disseminate the requisite information in respect of insurance products offered; and take into account the needs of the prospect while recommending an insurance product;

(d) undertake needs analysis for clients;

(e) compare products of insurers with which they have arrangement;

(f) recommend the product based on clients' needs;

(g) indicate the premium to be charged by the insurer for the insurance product offered;

(h) disclose the scales of remuneration in respect of the insurance product offered, if asked by the prospect;

(i) explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract;

(j) bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called "Insurance Confidential Report") along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect;

(k) inform promptly the prospect about the acceptance or rejection of the proposal by the insurer;

(l) obtain the requisite documents at the time of filing the proposal form with the insurer and other documents subsequently asked for by the insurer for completion of the proposal;

(m) render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer;

(n) advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary;

(o) forward any information received from the client regarding a claim or an incident that may give rise to a claim without delay;

(p) advise the client without delay of the insurer's decision or otherwise of a claim; and give all reasonable assistance to the client in pursuing his claim;

(q) ensure that statements made regarding the policies to the customer are not misleading or exaggerated;

(r) ensure the compliance of Section 64-VB(4) of the Act, as amended from time to time;

(s) draw the attention of the client to Section 41 of the Act, as amended from time to time, which prohibits rebating and sharing of commission/remuneration;

(t) ensure the compliance of AML and KYC guidelines in force.

(u) act in a fiduciary capacity towards its clients and shall disclose all conflicts of interests as and when they arise;

(v) follow recognized standards of professional conduct and discharge his functions in the interest of the policyholders. Comply with provisions of the Act, as amended from time to time, IRDA Act, 1999, IRDA (Protection of Policyholders' Interests) Regulations, 2002 and any other regulations, guidelines, circulars, directions issued by the Authority from time to time.

(ii) No ISP shall, -

(a) solicit or procure insurance business without holding a valid certificate,

(b) induce the prospect to omit any material information in the proposal form;

(c) induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal;

(d) behave in a discourteous manner with the prospect;

(e) interfere with any proposal introduced by any other insurance intermediary;

(f) offer different rates, advantages, terms and conditions other than those offered by his insurer;

(g) demand or receive a share of proceeds from the beneficiary under an insurance contract;

(h) force a policyholder to terminate the existing policy and to effect a new proposal through him within three years from the date of such termination;

(iii) Every ISP shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulated time, by giving notice to the policyholder orally and in writing;

(iv) FSE. - Every FSE shall abide by the code of conduct prescribed by the respective regulatory/statutory authority which oversees that particular activity.

(v) Violation of Code of Conduct by the ISP. - The Code of Conduct specified above has to be adhered to by the ISP. The Authority shall initiate disciplinary action against the ISP and the IMF they are representing for any noncompliance.

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