'Insurers must adopt fairness in approach on claim settlement'
Generali has established strong governance practices in the group and has always stressed on a robust compliance and governance framework in its Group entities
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Future Generali India Life Insurance Company, a subsidiary of the Generali Group, has implemented robust ethics, compliance and governance framework based on the guidance given by Generali Group. Conjeevaram Baradhwaj, Executive VP (legal & compliance), Future Generali India Life Insurance, in an interview with Bizz Buzz, says, "The two main areas in policyholders' protection are ensuring transparency at the point of sale and fair settlement of claims. Certain insurance products like life insurance and health insurance are complex, contain many jargons, terms and conditions which a common man finds difficult to understand. It is imperative that insurance companies ensure that distributors explain the products to customers completely." on settlement of claims, the insurers must adopt fairness in approach. Purpose of taking insurance is consummated only when claims are settled. However, insurance companies will have to be careful in weeding out fraudulent claims to protect the interests of genuine policyholders. This is another important area which regulator focuses from policyholders' protection perspective, he adds
What according to you is the key role of a regulator especially concerning the insurance sector?
The key mission of the regulators in India is to protect the interests of the customers in the industry. For example, key mission statement of Insurance Regulatory & Development Authority of India (IRDAI) is to protect the interests of policyholders and to promote the orderly growth of the industry. Aimed at this direction the IRDAI has framed various regulations, including the regulation on protection of policyholders' interests.
The two main areas in policyholders' protection are ensuring transparency at the point of sale and fair settlement of claims. Certain insurance products like life insurance and health insurance are complex, contain many jargons, terms and conditions which a common man finds difficult to understand. It is imperative that insurance companies ensure that distributors explain the products to customers completely. Moreover, insurance products are based on the principle of 'utmost good faith'. This means that the person taking the policy is required to disclose full facts about the status of the subject matter of insurance. For example, life and general insurance requires complete disclosure about the status of the health and personal history of the person being insured in the application form for life insurance. If these are not disclosed properly, claim may be rejected on the grounds of non-disclosure. This is an important area in policyholders' protection.
Secondly on settlement of claims, the insurers must adopt fairness in approach. Purpose of taking insurance is consummated only when claims are settled. However, insurance companies will have to be careful in weeding out fraudulent claims to protect the interests of genuine policyholders. This is another important area which regulator focuses from policyholders' protection perspective.
Can you elaborate on the compliance and governance framework that Generali as a Group has established to protect its policyholders across countries?
Generali has established strong governance practices in the group and has always stressed on a robust compliance and governance framework in its Group entities. Generali Internal Governance System comprises of a set of internal policies, guidelines and technical measures aims to support a sound and effective group system of governance and to enhance the consistent implementation of group internal regulations across the group. These policies, which have been developed out of the best practices of the Generali Group over the past 190 years of its existence, not only ensure a strong governance across various functions but also ensure that the joint venture companies protect the interests of Policyholders as well.
Can you throw some light on the best practices of Generali which Future Generali Life has adopted?
Future Generali India Life Insurance Company Limited, a Subsidiary of the Generali Group, has implemented robust ethics, compliance and governance framework based on the guidance given by Generali. Some of the policies approved by the Board of the Company for implementation include compliance management system policy, directives on system of governance, Whistle blower policy, conflict of interests policy, code of conduct etc., based on the guidance provided by Generali. Online training is provided to the employees of the company on various compliance related policies and attendance is monitored. Besides online training, the zonal sales compliance team members regularly visit branch offices and provide on the spot face-to-face training to the employees of the branch offices, especially sales employees. Further these interactions at the branch offices help the compliance team members to understand the challenges of these employee and provide feedback to the management for addressing the challenges. Clarifications are provided to the questions raised by the employees across various offices. Thus, compliance engagement and interaction is an integral part of the compliance management system of the company.
How does these policies not only ensure strong governance across various functions, but also ensure and protect the interests of policyholders as well?
These policies provide framework for compliance, ethics and governance. For example, Compliance Management System emphasises correctness and honesty as the key values. It also outlines the roles and responsibilities of Board and management in supporting implementation of compliance requirements, ensuring independence of compliance function, setting the Tone from the Top, Competency of compliance staff, Compliance risks management etc. The Policy also insists that Compliance team shall not hold any operational responsibilities and must oversee the implementation and monitoring of compliance requirements across the Company. This is to avoid conflicts of interest. For example, which the Customer operations team is responsible for settlement of claims, the Compliance team monitors the settlement of claims. Chief Compliance Officer directly reports to CEO and to the Ethics & Compliance Committee & Board and has independence in functioning. Any concerns regarding compliance with any matters, including Policyholders' Protection areas, can be escalated for ensuring corrective action. Thus the Compliance framework is designed to ensure independent oversight on the compliance and regulatory matters by the Compliance team.
Since there are many applicable laws and guidelines, how do you ensure that your company implements the compliance requirements & meets regulatory expectations?
A dedicated compliance team of Future Generali Life, headed by Chief Compliance Officer, is responsible for assimilation and dissemination of compliance requirements to the respective functions within the company and assist in implementation of compliance requirements by such functions. Besides coordinating with other functions, compliance function also ensures timely submission of regulatory returns, coordinating with regulator for their requirements, assisting in regulatory inspections and closure of inspection reports. All requirements of the regulator are taken care by the compliance function which coordinates with the respective functions for closure.
What are the various initiatives that FGILI takes for create awareness on compliance requirements?
To focus on the importance of compliance, Generali celebrates "Compliance week" in October/November every year for re-emphasising its commitment towards compliance. During the week, compliance team organises various activities within the company to bring visibility within the organisation on the importance of compliance. Ethics and compliance workshops, compliance quiz programmes, e-mailers from the Generali Compliance Officials, Company CEO and senior management's messages to employees, posters, customised desktop wallpapers, banners on mobile phones are some of the activities generally conducted during the week. This year's compliance communication was around the theme of Whistle blowing, customer advocacy, inclusion and tone from the top, while, a week is celebrated to highlight the role of compliance in the system. Compliance Team continues to send communications periodically throughout the year.
