Insurance Regulatory and Development Authority of India (IRDAI) has issued a warning by its letter dated 21/08/2015 to Star Health for giving advertisement in Economic Times Mumbai edition, claiming itself number one, which was against the rule of IRDAI.
No claim of ranking by an insurance company, as regards its position in the insurance market, based on any criteria (like premium income or number of policies or branches or claim settlement etc.) is permissible in any of the advertisement –┬аIRDAI circular No. 007/IRDA/CIR/ADV/May-07
After the ad IRDAI issued a show cause notice to Star Health in July 2015, and in reply to that Star Health admitted their mistake. Star Health said that in future it will give advertisement as per guidelines issued by IRDAI.
IRDAI as objected against a advertisement given by Star Health in Economic Times Mumbai Edition. In the advertisement insurer claimed itself as number in Health Insurance segment amongst all private as well as State owned insurance companies .
IRDAI circular No. 007/IRDA/CIR/ADV/May-07 in its para 5 restricts a insurance company to give any details about
- Any claim of rating/award should be based only on those declared by entities which are independent of the insurance company and its affiliates.┬аInsurance company and its affiliates should not however, procure services from such independent entities so as to get a rating/award.
- Source of such rating/award is to be disclosed conspicuously and legibly in such advertisements.
- No claim of ranking by an insurance company, as regards its position in the insurance market, based on any criteria (like premium income or number of policies or branches or claims settlements etc.,) is permissible in any of the advertisements.
Main purpose of the IRDAI is┬аto protect the interests of the insuring public, enhance their level of confidence on the nature of sales material used and ultimately encourage fair business practices.
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