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Have you checked if your insurance agent is blacklisted?

Insurance companies maintain a list of agents removed from the system. Verify that before you buy a policy from the agent

March 17, 2018 / 09:34 AM IST

Picture this. You get a call from the friendly neighbourhood agent to buy a policy now that only last few days of the financial year remain. "Buy it now to save taxes," he says. You do as he says but realise later that he is not an authorised agent and has fled with the cash.

Annually, about 4000-5000 policies are fraudulently sold by agents who have been blacklisted by companies. Since they have been associated with insurance companies in the past, these agents have all the policy documents needed to close a transaction. Since none of us bother checking the agent's licence, there is a chance of being duped.

All insurance companies are required by Insurance Regulatory and Development Authority of India (IRDAI) to disclose the list of blacklisted agents on their website for customers. This also gives the customer an idea of why an agent was terminated from service. Further, IRDAI also has launched a common portal wherein the list of insurance agents and the company they work for, can also be verified in the future.

Often, fraudulent persons, knowing fully well how policy sales work, cheat customers and collect the first year premium and flee. Usually, they demand the premiums in cash so that they do not leave any trail behind. In some cases, individuals have also received calls to surrender existing policies and buy "special double the investment" plans with bonuses from IRDAI.

Due to these incidents, IRDAI has mandated insurers to display in all their print and television advertisements that the regulator does not declare any bonuses nor does it sell any policies.

One simple way would be to verify the licence issued by the insurance company to the agent. They can visit the insurance company's website and cross verify to see whether they are still associated with the company. Since there is a lag in updating the blacklisted agents' list, a customer can get the agent's licence number and call up the customer care to check if he is still an active agent with them.

Insurers usually take no responsibility against unknown persons selling their policies and even if a complaint is made, it will be rejected.

With some customers still buying insurance at the end of a financial year and usually in the last two weeks of March, they are an easy target for unscrupulous agents who misuse the system. While rushing in to complete the tax savings for the year, it will be a good idea to invest a few minutes in ascertaining the identity of the agent you are buying it from. Else, you could be taken for a ride.

M Saraswathy
first published: Mar 17, 2018 09:34 am

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