1. POS – Life insurance guidelines

Background:

The Authority having considered the feedback received from Life Insurers/Life Council in response to the Exposure Draft dated January 12, 2016 on 'Point of Sales Person — Life Insurance', has decided to extend the concept and scope of Guidelines on "Point of Sales Person — Non-life & Health Insurers" issued vide Ref No, IRDA/Int/GDIJORD/183/10/2015 dated 26.10.2015 to Life Insurers too for simple plain vanilla type of products (referred to as POS — Life Products) if each and every benefit of such product is —

Simple to understand

Stated upfront clearly

Fixed / pre-defined

Keeping the above in view and in order to give added fillip in providing easy access to life insurance to people at large and to enhance insurance penetration and density, the Authority, issues the following Guidelines on 'Point of Sales Person in Life Insurance' by exercising the powers vested with the Authority under Sections 14 (1), 14 (2) (c) and 14 (2) (e) of IRDA Act -1999.

1. Scope and Applicability of these Guidelines

a. These Guidelines shall apply to "Point of Sales Persons" and those engaging "Point of Sales Persons".

II. Definition

  1. "Act" means the Insurance Act, 1938.
  2. "Authority" means Insurance Regulatory and Development Authority of India established under Section 3 of the IRDA Act, 1999.
  3. "NIELIT" means National Institute of Electronics and Information Technology which is an autonomous Scientific Society of Department of Electronics and Information Technology, Government of India and is designated as the Training and Examining Body for the "Point of Sales Persons".
  4. "Point of Sales Person — Life Insurance" (herein after referred to as POSP — LI) means an individual who possesses the minimum qualifications, has undergone training and passed the examination as specified in these Guidelines and solicits and markets only such products as specified by the Authority

Ill. Point of Sales Person- Life Insurance (POSP- LI)

  1. Every "Point of Sales Person" shall be identified either by his Aadhar Card Number or by his PAN Card.
  2. The POSP-LI shall be at least 18 years age completed and shall have educational qualification of 10th standard pass.
  3. POSP-LI shall be sponsored to NIELIT, by the life insurance company or the insurance intermediary with whom she/he shall work, for undergoing online training specified for "Point of Sales Person".
  4. The fees for the online training and examination of a candidate shall not exceed Rs five hundred which will be remitted to NIELIT either by the insurance company or the insurance intermediary who is sponsoring the candidate.
  5. The training module as approved by the Authority will be hosted on NIELIT website.
  6. Candidates sponsored shall appear in the online examination conducted by NIELIT who shall be the examining body.
  7. On successful passing the examination, he will be issued a letter by NIELIT certifying him to be a "Point of Sales Person".
  8. Point of Sales Person- Life Insurance is authorized to solicit and market only Point of sales — Life insurance products.

IV. Appointment of Point of Sales Person

  1. An Insurer or an insurance intermediary authorized to solicit and market life insurance business can engage a "Point of Sales Person".
  2. A "Point of Sales Person- Life Insurance” engaged by an insurance intermediary can sell the POS — Life Products of all such Insurers whose life insurance products the respective intermediary is authorized to sell.

V. Products solicited and marketed by "Point of Sales Person"

  1. The "Point of Sales Person" can sell Life Insurance Products filed with and approved by the Authority as POS-Life Products, which may be
    1. Pure Term Insurance product with or without return of premium
    2. Non-linked (Non-Participating) Endowment product
    3. Immediate Annuity Product
    4. Any other product / product category, if permitted by the Authority. Detailed Guidelines with regard to Point of Sale — Life Insurance Products are issued separately.
  2. Every policy sold through the "POSP-LI" shall be separately identified and pre­fixed by the name " POS — (name of product) ".

VI. Tagging of Proposal Form and Insurance Policy to Point of Sales Person

  1. Every proposal form, in paper or in paperless form, insurance policy and other related documents shall carry provision to record the Aadhaar card number or the PAN card number in order to tag the policy to the "Point of Sales Person" who is selling the said policy.
  2. The life insurer shall be responsible to record the Aadhar card number or the PAN card number of the "Point of Sales Person" in the proposal form and insurance policy. The life insurer shall be responsible for the conduct of the "Point of Sales Person" representing him and any misconduct on the part of the said Point of Sales Person shall make the life insurer liable to penalty as per provisions of Section 102 of the Act.
  3. For sales affected through the insurance intermediary, the insurance intermediary shall record the Aadhar card number or the PAN card number of the "Point of Sales Person" in the proposal form and similarly the insurer also would require to-do the same in the insurance policy. The insurance intermediary shall be responsible for the conduct of the "Point of Sales Person" engaged by it and any misconduct on part of the Point of Sales Person shall make it liable to a penalty as per provisions of Section 102 of the Act.
  4. One of the factors that shall be considered while renewing the certificate of registration of the insurance intermediary shall be the conduct of the "Point of Sales Persons" working with insurance intermediary.

VII. Compliance

  1. The Life Insurers and Insurance Intermediaries shall make suitable provision in their policy administration system to capture the Aadhar Card number or the PAN card number details of the "Point of Sales Person — Life Insurance".
  2. The "Point of Sales Person- LI" when engaged by the insurer shall place business with that insurer subject to compliance of rules and procedures of that insurer.
  3. The Authority shall specify the format and the manner of maintaining the records and filing returns which the insurer and the insurance intermediary shall maintain in electronic form which can be accessed by the Authority on a remote location basis. The formats shall give the number of policies sold and the premium collected by the "Point of Sales Person" on a monthly basis.

VIII. Power to clarify

In case of any doubt or ambiguity with regard to any of the provisions of the guidelines, the same shall be clarified by the Chairperson of the Authority whose decision shall be final and binding on all the concerned.

: Modification to Guidelines on Point of Sales Person — Life Insurance

This is further to the guidelines issued on the Point of Sales Person dated 7th November , 2016 .

Based on the feedback of the Insurers and taking into account the practical ease for Insurer / intermediaries, the competent Authority has decided to dispense with the condition of training from and passing of the NIELIT examination and has amended the requisite procedure / qualification for being a POS Person as follows: The Life Insurer or intermediary proposing to engage POS Person shall

  1. Conduct an in — house training of fifteen (15) hours for the candidate.
  2. Conduct an examination after successful completion of the training.
  3. issue certificate to the candidate passed in the examination
  4. Engage the successfully passed candidate as POS person by entering into a written Agreement, specifying suitable terms and conditions.
  5. Maintain a proper training and examination record for at least five (5) years from the end of the financial year in which these are conducted and shall be made available to the inspecting official of the Authority during on-site inspection.

The Model Syllabus for training of `POS Person- Life insurance' is herewith attached in Annexure— I which may include the features of various POS products designed by the Insurer from time to time and may be modified and developed according to the changing need of the insurer and intermediaries. Please note that other terms and conditions of the Guidelines would remain unchanged.

2. POS – Product Guideline

a. Categories of POS – Products.

Background:

Reference is drawn to Sections II (d) and V(1) of Guidelines on Point of Sales Person-Life insurance, dated November 7, 2016 which mention the Point of Sales - Life Insurance Products.

Consequently the Authority, in order to give an added fillip in providing easy access to Life insurance Products to people at large and to enhance insurance penetration and density as part of its Development agenda, having considered the feedback received from the stakeholders to the Exposure draft dated March 23. 2016 on the subject, issues the following 'Guidelines on Point of Sales — Life Insurance Products' by exercising the powers vested with the Authority under Sections 14 (1), 14(2) (c) & 14 (2) (e) of IRDA Act -1999,

Scope and Applicability of these Guidelines:

These Guidelines shall be applicable to the products offered by Life Insurers proposed to be sold through "Point of Sales Persons".

  1. Definition: "Point of Sales (POS) Product" means the simple plain vanilla type of Product ,wherein each and every benefit is predefined and disclosed upfront clearly at the time of Sale itself and is very simple to understand.
  2. Categories of POS Products: The Category I Nature of Products offered under POS - Life Insurance shall be as given hereunder:
    1. Pure Term Insurance Product with or without return of premium
    2. Non-linked Non-Participating Endowment Product (Money back feature also allowed)
    3. Immediate Annuity Product
    4. Any other product / product category, if permitted by the Authority The product names should be prefixed with the words "POS" (POS-Product Name)
  3. The parameters of the aforesaid categories of products mentioned in point No. 1 above shall be as shown in Annexure —I.
  4. The condition/eligibility/parameters mentioned in the Annexure —1 for different Categories of POS Products are given as lower/upper limits within which the Insurer has the flexibility to design the product.
  5. Solicitation and marketing of these products is allowed to be done through
    1. Point of Sales Persons — Life insurance
    2. Individual Agents of the Life Insurer
    3. Intermediaries authorized to solicit life insurance products d Insurer directly
  6. Life Insurers shall offer these products only as Non-Linked and Individual insurance products.
  7. Unless explicitly exempted in these guidelines / Annexure-I, the extant Regulatory provisions shall be applicable mutatis mutandis to these products.
  8. The CEO and the AA shall attach a certificate of compliance to these guidelines along with product filing.
  9. Any existing Product may be sold as POS Product, subject to modification to comply with these guidelines and approval of the Authority.
  10. 'Key Features Document (KFD)—cum -- Proposal Form' Format:
    1. There would be two parts of the 'Key Features Document cum Proposal Form', where the first part would be the KFD and second part would be the Proposal Form. Both the parts are joined by perforation so that the first part (KFD) can be easily separated and given to the proposer/ Life Assured for his/ her record and the second part (Proposal Form) is to be preserved by the insurer I representative for necessary processing.
    2. Key Features Document (KFD) must contain all the key benefits under the plan including (a) Sum Assured on Death (b) Maturity Benefit (c) Surrender Value (d) Paid Up Value, if any (e) Exclusions (f) Registered name and address of the life insurer with logo etc.
  11. Every "Key Features Document cum Proposal form" should contain unique reference number on both parts.
  12. The TAT for issuance of policy / acceptance of Risk and communication of Acceptance or otherwise message to the customer of such policy would not be more than two working days (excluding holidays) from the date of collection of proposal at the point of sale.
  13. If the Proposal is not accepted for any reason whatsoever, the refund of payment be done to the Proposer / Life Assured within 7 days from the date of decision.