IRDAI Proposes Linking Insurance Policy to Salesperson

• 01 Jul 2026
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Soon, purchasing an insurance policy through your bank or an agent may involve an added accountability level. The Insurance Regulatory and Development Authority of India (IRDAI) has proposed that every insurance policy be digitally linked to salesperson who sold it. This initiative aims to disentangle the process of identifying the responsible party in cases where customers claim they were mis-sold an insurance product. 

This proposal is a part of a broader reform of insurance regulations after enactment of the Sabka Bima Sabki Raksha Amendment of Insurance Laws Act 2025. In addition to expanding investment opportunities and revising rules for intermediaries, the insurance industry regulator has suggested several measures so as to enhance transparency, accountability and consumer protection within the insurance sector. 

What Has the Insurance Regulator Proposed?

According to the IRDAI’s draft proposal, every insurance policy would be linked to the specific individual involved in the sale. This may include bank employees, insurance agents, qualified brokers, insurance salespeople, authorized verifiers or point-of-sale personnel. 

Currently, when a policy is sold through banks/corporate agents, the responsibility typically lies with the organization. However, if the draft proposal gets implemented, each and every policy will feature a digital trail that identifies the individual seller. This would make it easier to trace who advised or sold the product. 

Why Has IRDAI Proposed This Change?

In India, insurance mis-selling has been a major concern for many policyholders. Many of them have reported being sold policies that were presented as products similar to fixed deposits, guaranteed return plans or short term investments. However, they later on found these policies included lock in periods, surrender charges, exclusions or risks associated with market fluctuations that they weren't aware of before purchase. The draft proposal aims to tag every policy to the individual seller to enhance traceability and accountability at the point of sale. If a customer later files a complaint, insurers and intermediaries will be able to identify the salesperson and they can assess whether the recommended product is aligned with the customer's needs or not. 

It's important to note that this proposal does not guarantee that every complaint of mis-selling will be automatically accepted. The resolution will still rely on the policy documents, disclosures, benefit illustrations and other records maintained during sale. 

How will Policyholders be Benefitted?

The primary advantage for the policyholders is likely to be increased accountability. Instead of limiting responsibility to the insurance company or the bank, there will be a clear record regarding the individual who handled the policy’s sale. This transparency can help in the investigation of complaints and clarify what information was communicated to customer at the time of purchase. 

Additionally, the proposal could encourage better documentation during the sales process and place a greater emphasis on explanation of premium commitments, policy exclusions, waiting periods, lock-in conditions and surrender rules before a policy is finally issued.

Source: India Today News