Advertising and claims go hand in hand but in many categories like insurance it tends to get on sticky wicket when the claims are made beyond possible delivery scenarios. Adverts push them out nevertheless, in the hope of creating demand for the product.
Over the years, insurance advertising has operated in a fairly regulated environment in India. However, the changing consumer demands as well as the evolving marketing environment require a constant evaluation of the regulatory frameworks.
The new rule book
- In order to strengthen the regulatory framework for one of the most advertised Indian categories (insurance), the regulator Insurance Regulatory and Development Authority of India (IRDAI) has proposed a new set of guidelines to come into play.
- As per the release, IRDAI is seeking to come out with new advertisement regulations in order to “prohibit insurers from issuing advertisements that make claims which are beyond reasonable expectations of performance.”
Ensuring the insurance codes
- Another objective of the proposed IRDAI regulation is “to ensure that the insurers, intermediaries or insurance intermediaries adopt fair, honest and transparent practices while issuing advertisements, and avoid practices that tend to impair the confidence of the public.”
Reading between the lines and in fine print
- The proposed regulation is also seeking to ensure that the publicity material is relevant, fair and in simple language, enabling informed decision making.
- As per the draft, all insurance advertisements should ensure that "communications are clear, fair and not misleading whatever be the mode of communication. They should use material and design (including paper size, color, font type and font size, tone and volume) to present the information legibly and in an accessible manner", among other things for clarity.
Sell but don’t mislead
- The key changes in the framework would also include modifying definition of advertisements and rationalisation of certain other definitions, enlarging scope of the term 'misleading advertisement', and putting onus for enforcing compliance on advertisement endorsed by third parties on insurers for compliance.