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IRDA's insurance fraud advertising

In its purportedly anti-fraud advertising, the insurance regulator is trying to blame policy buyers for its own shortcomings

IRDA's insurance fraud advertising

You must have seen this ad on TV. A group of friends sit in a cafe, talking eating and drinking. One of them, Raju, gets a phone call that claims to be from IRDA. The caller has an offer promising guaranteed returns if Raju surrenders his insurance policy and gets a new one being offered. Just then, a waiter bursts into a song warning Raju against fake calls selling insurance. The friends join in on the singing, thereby saving Raju.

There is at least one more where someone pretending to call from IRDA to sell insurance is thwarted in another equally implausible way. In this second ad, the caller is also shown, who is a young man with a stubble, has several buttons on his shirt open, and is wearing a thick gold chain, thus conforming to the cliched Bollywood/comic-book appearance of a small-time criminal.

In this portrayal of the insurance sellers behind such phone calls, IRDA is being less than honest. The perpetrators of these calls is not the comic-book criminal shown in the ads but legitimate, IRDA-approved insurance agents and distributors selling a legitimate IRDA-approved insurance product and the final beneficiary of the sale is a legitimate, IRDA-licensed insurance company. If you receive one of these calls and play along with the caller, you will always find that it's a completely normal insurance sales process which just began with a little fudge about IRDA so that you wouldn't disconnect the call.

IRDA's ads are trying to pass the blame onto non-existent criminals and a financially illiterate public. In reality, the blame lies with the product and commission structure that IRDA has put in place, inadequate detection of malpractices and a gentle punishment regime. The real reason such sharp practices flourish is that the most lucrative commissions come from insurance products that are so harmful to the buyer that they can't be sold truthfully. And if the buyer has experienced them earlier, then they can't be sold at all without some huge lie.

If IRDA actually has insurance buyers' interests at heart, then it should fix the industry it supposedly regulates. Distributing money to ad agencies and TV channels is not the solution.