FULL OF LIFE
• Life insurers will submit data for both 'declined lives' and 'highly sub-standard lives'
• A 'declined life' is defined as one which has been rejected by the insurer on the grounds of medical history, family history and financial underwriting of the insured
• A 'sub-standard life' is one where the insurer determines that the risk cover is high but it can be sustained by loading extra premium on the policy issued.
New Delhi, Aug. 22: The Insurance Regulatory Development Authority (IRDA) has asked life insurance companies to submit and share data to prepare a comprehensive directory on ‘declined lives’.
As part of the initiative taken at the recently held life insurance council meeting at Chennai under the supervision of IRDA, all life insurers will submit data from April 1, 2002 onwards for both ‘declined lives’ and ‘highly sub-standard lives’.
A ‘declined life’ is defined as one which has been rejected by the insurer on the grounds of medical history, family history and financial underwriting of the insured.
A ‘sub-standard life’ is one where the insurer determines that the risk cover is high but it can be sustained by loading extra premium on the policy issued.
Industry sources reveal that some life insurers are opposed to the idea of sharing their data for sub-standard lives. However, IRDA has supposedly made it clear that companies which do not contribute to the data pool will not have access to the negative database. Only those who contribute to the data pool will have access to it as a closed user group.
The tariff advisory committee (TAC) will collate separate databases for the life and general insurance industries on the lines of banking industry’s Credit Information Bureau of India Limited and the credit card industry’s database on defaulters.
Most life insurers are keen on forging an alliance on the issue of sharing negative databases which they believe will plug or minimise the loopholes in the system of the medical investigation process before a life insurance cover is sold to a customer.
The move gains importance in the light of the fraudulent activities which are taking place in the insurance sector.