Banks, brokers get most complaints for mis-selling insurance products

 In 2018-19, banks received more than 12,000 mis-selling complaints; brokers close to 11,000. The number was even higher in FY18.

The number of mis-selling complaints received against private life insurers has gradually reduced over the years. In 2019-20 (FY20), this number came down to 35,178, from 47,503 in 2017-18 (FY18).

Interestingly, it is the banks and brokers who receive the most number of mis-selling complaints than any other distribution channel.

According to the data from the Insurance Regulatory and Development Authority of India’s (Irdai’s) annual report for FY20, banks and brokers received close to 10,000 mis-selling complaints each. In 2018-19, banks received more than 12,000 mis-selling complaints; brokers close to 11,000. The number was even higher in FY18.

Some of the possible ways of mis-selling a product are incorrect explanation of product features, policy sold to gullible customers, and high targets for the sales team.

Furthermore, Irdai’s annual report says the number of unfair business practices complaints received against life insurers has reduced 12.36 per cent to 43,444 in FY20, of which 3,994 were against Life Insurance Corporation of India and 39,450 against private insurers.