IRDAI IC38 (Insurance Agent) Insurance Sales, Documentation and Ethics Syllabus

What is an endorsement in an insurance policy?

A written document/amendment attached to a policy that records any agreed change to its terms, conditions or details, forming part of the contract.

Give examples of changes recorded through endorsements/policy alterations.

Change of name or address, correction of date of birth, change of nominee, change in sum assured or premium mode, change of policy term, or addition/removal of a rider.

What is a renewal notice/premium reminder?

A communication sent by the insurer informing the policyholder that a premium is due, stating the amount and due date so the policy stays in force.

What is the grace period for premium payment?

The extra time allowed after the due date during which a premium can be paid without losing benefits — typically 15 days for monthly mode and 30 days for other modes in life insurance.

What happens if a life insurance premium is not paid within the grace period?

The policy lapses; cover ceases (subject to any paid-up value), and it can usually only be restored through revival/reinstatement within the allowed period.

What does ethical behaviour and integrity in selling require of an agent?

Acting honestly, disclosing full and accurate information, putting the client's interest first, recommending suitable products, and not making misleading statements.

What is mis-selling in insurance?

Selling a policy through misrepresentation, false promises, suppression of facts, or selling an unsuitable product to a customer who does not need it or cannot afford it.

List common forms of mis-selling.

Misstating returns/benefits, hiding charges or exclusions, selling unsuitable products, churning/replacing policies for commission, forging signatures, and promising guaranteed returns on market-linked products.

What are the consequences of mis-selling for an agent?

Cancellation of agency licence, forfeiture of commission, penalties/fines, legal action, reputational damage, and the insurer being liable to compensate the customer.

What does KYC (Know Your Customer) require?

Verifying the identity and address of customers before/at the time of issuing a policy, using valid proof of identity and proof of address documents.

Why are KYC norms enforced in insurance?

To prevent fraud, money laundering, terrorist financing and impersonation by ensuring the insurer knows who the genuine customer is.

Give examples of valid KYC documents (Officially Valid Documents) in India.

PAN card, Aadhaar, passport, voter ID, driving licence — used as proof of identity and/or proof of address.

What is Anti-Money Laundering (AML)?

A set of guidelines and procedures aimed at preventing criminals from disguising illegally obtained money as legitimate funds through financial products such as insurance.

What is 'money laundering'?

The process of concealing the origins of illegally obtained money so it appears to come from a legitimate source — typically through placement, layering and integration.

What are the three stages of money laundering?

1) Placement (introducing illicit cash into the system), 2) Layering (moving funds to obscure the trail), 3) Integration (bringing the laundered money back as apparently legitimate funds).

Under AML, what is the agent expected to report?

Suspicious transactions and high-value/unusual transactions that may indicate money laundering, to the insurer's Principal Officer for reporting to the FIU-IND.

Why is fair and prompt claims settlement considered the 'moment of truth' in insurance?

Because the claim is when the customer actually receives the promised benefit; fair, fast settlement proves the insurer's value and is the real test of the contract.

What are the main steps in the life insurance claim procedure (maturity claim)?

Insurer sends an intimation before the maturity date, the policyholder submits the discharge form and original policy document, and the insurer pays the maturity proceeds on the due date.

What are the main steps in a life insurance death claim procedure?

Claim intimation, submission of claim forms with death certificate, policy document and proof of title/identity, insurer's verification/investigation, and then settlement to the nominee/beneficiary.

What key documents are required for a life insurance death claim?

Death certificate, original policy document, claim/claimant's statement form, proof of age (if not admitted), and identity/relationship proof of the nominee; medical/hospital records for early claims.

What is an 'early claim' in life insurance and why does it get extra scrutiny?

A death claim arising within the early years of the policy (e.g. within 3 years); it is investigated more closely to rule out fraud, suppression of material facts or anti-selection.

What are the basic steps of the general insurance claim procedure?

Intimate the insurer immediately, register the claim, survey/assessment of loss by a surveyor, submission of supporting documents, assessment of admissible amount, and settlement.

What is the role of a surveyor in general insurance claims?

A licensed surveyor/loss assessor investigates, assesses and quantifies the loss and reports the admissible claim amount to the insurer for larger general insurance claims.

What does 'repudiation of a claim' mean?

The insurer's rejection of a claim — refusing to pay because it falls outside the policy terms, is fraudulent, or breaches conditions such as non-disclosure of material facts.

Give common grounds on which a claim may be repudiated.

Non-disclosure/misrepresentation of material facts, exclusions under the policy, lapse of policy, fraudulent claim, breach of warranty/condition, or claim outside the period of cover.

What avenues exist for a policyholder to resolve a claim dispute in India?

The insurer's internal Grievance Redressal Cell, the Insurance Ombudsman, the IRDAI/Bima Bharosa (IGMS) grievance system, Consumer Forums, and civil courts.

What is the role of the Insurance Ombudsman?

An independent authority that resolves complaints/disputes between policyholders and insurers (e.g. claim repudiation, delay, premium disputes) quickly and without cost to the complainant, within prescribed monetary limits.

What is the agent's role in assisting a claimant?

Guiding the claimant on procedures, helping fill claim forms, ensuring correct and complete documents are submitted, liaising with the insurer, and giving moral/empathetic support during settlement.

Why should an agent never assist in falsifying a claim?

Because helping inflate or fabricate a claim is fraud — it is illegal, breaches the agent's code of conduct, can lead to licence cancellation and prosecution, and harms the insurer and honest policyholders.

What is 'free look period' and how does it protect the policyholder?

A period (typically 15 days, 30 days for electronic/distance marketing) after receiving the policy during which the policyholder can review and cancel it for a refund if dissatisfied with the terms.

What is the difference between 'representation' and 'non-disclosure' as causes of voidable policies?

Representation is a statement made by the proposer that turns out untrue (misrepresentation); non-disclosure is failing to reveal a material fact. Both, if material, can make the policy voidable at the insurer's option.