Consider this: You have purchased a life insurance policy and are regularly servicing it. However, during the course of the policy you realise that the agent from whom you had purchased the policy is no longer with the same insurance company and has moved on. Well, in such a scenario, your policy gets termed as ‘orphaned’. Orphaned policies are those policies which are held by policy owners who no longer have an agent or an intermediary to provide servicing.
Recently, IRDA has released guidelines pertaining to the same:
Allotment to another active agent
Insurance companies have been instructed to allot the lapsed orphaned policies to active individual insurance agents (allottee agents) for rendering effective servicing to policyholders. Those orphaned insurance policies that are in a lapsed condition on the date of allotment are eligible for allotment. Before allotting orphan policies, insurers must consider the track record of the agent in terms of complaints registered against him/her.
Interestingly, the number of orphaned insurance policies allotted to an agent should not exceed 20% of the total number of new policies procured by him/her, in force as on the date of allotment.
Intimation to policyholders
It is the responsibility of the life insurer to notify details of the allottee agent to the concerned policyholders.
Monitoring of lapsed orphaned policies
According to the norms prescribed, if an allottee agent fails to revive/reinstate a lapsed orphaned policy within six months from the date of allotment, life insurers have the discretionary power to undo the allotment by issuing a formal notice to the ‘concerned agent’ and re-allotting the policy to any other agent.
Single premium & zero commission policies are not eligible for allotment
Limited premium payment policies including single premium life insurance policies cannot be allotted after the expiry of the premium paying term. Insurance products promoted in direct/online marketing as ‘File and Use’ without any commission outgoes are also not eligible for allotment.
The above article is contributed by IndiaFirst Life Insurance
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