Don't force sell insurance: FinMin to banks

New Delhi, December 23

The Finance Ministry has written a letter to chiefs of public sector banks asking them not to unduly pressurise the field staff for selling insurance products, which in some cases, were sold to unsuspecting senior citizens above 75 years of age.

As per the latest IRDAI annual report, there were over 23,000 cases of mis-selling in 2021-22 while the number of mis-selling complaints per 10,000 policies sold was at 31.

The Ministry also pointed out that the Central Vigilance Commission (CVC) has raised objections, as incentives for selling insurance products bring not only pressure on the field staff but the core business of banking also gets affected and quality of advances may get compromised in the lure of commission and incentives for staff.

The Department of Financial Services said it has received complaints of banks and life insurance companies adopting fraudulent and unethical practices to unload policies on bank customers. There have been instances where life insurance policies were sold to customers aged above 75 years in Tier II-III cities, it noted.