IRDAI proposes free access to insurance prices without personal details

MUMBAI: Insurance shopping may soon come with fewer strings attached, as IRDAI looks to stop consumers from handing over their personal details simply to find out what a policy costs. The Insurance Regulatory and Development Authority of India (IRDAI) has proposed that insurers and insurance distributors should allow consumers to access product features, pricing and quality-related information without first requiring personal details such as a mobile number or email address.

The proposal is part of IRDAI’s consultation paper, ‘Recalibrating Economics of Insurance Distribution’, which seeks to make the insurance distribution ecosystem more transparent and customer-centric.

At present, a consumer browsing an insurer or distributor’s website may be asked to enter contact details before accessing basic information about a policy. IRDAI has specifically identified this practice as a concern, describing it as one of the ‘dark patterns’ seen on the websites of insurers and distributors.

According to the regulator, requiring personal information before allowing access to product features and pricing is also contrary to guidelines issued by the Central Consumer Protection Authority under the Consumer Protection Act, 2019.

The proposed framework would draw a clearer line between researching an insurance product and becoming a sales lead. Consumers would be able to compare policies, understand features and check prices first, with personal details potentially required only when they choose to move ahead with a purchase or seek further assistance.

That could make a difference in a category where comparison is often part of the buying journey. A consumer looking at health or life insurance, for instance, may want to compare premiums, coverage, features and benefits across several products before deciding whether to engage with an insurer or distributor.

The proposal therefore targets a familiar digital friction point: giving away contact information before knowing whether the product is even worth considering.

IRDAI’s reference to ‘dark patterns’ covers digital design practices that can influence, mislead or steer users towards actions they may not otherwise have taken. In the insurance context, the regulator’s concern is that mandatory lead forms can turn an information search into a sales opportunity before the consumer has made that choice.

However, the proposed change is not a final rule yet. IRDAI has issued the consultation paper and invited stakeholder comments until October 25. The final regulations could consequently differ from the proposals currently under consideration.

The personal-data proposal also sits within a much broader rethink of how insurance distribution works.

IRDAI is examining areas including distribution structures, expenses, commissions, market conduct, transparency and digital infrastructure. The consultation paper proposes three broad categories of distribution entities: Insurance Distribution Entities (IDEs), Insurance Distribution Persons (IDPs) and Market Infrastructure Institutions (MIIs).

The regulator has also proposed recalibrating the Expense of Management (EoM) framework and changing the structure of commission limits.

Taken together, the proposals point towards an insurance marketplace where consumers can get the information first and make the decision next, rather than entering the sales funnel simply to see what is on offer.