IRDA issues discussion paper on Tying/Bundling in Insurance

IRDA has sought views/feedback on the Cross-selling of products in financial services, including insurance products, is common. Insurance products may be bundled with other financial services or with goods. 

Tying is defined as two or more products packaged together where at least one of the products is not sold separately while Bundling occurs when products are packaged but are also available separately.

There could be various issues of concern for the consumer that arise from cross-selling. Packaging two or more products could become unfair to the consumer when it impedes his or her choice or makes price comparisons difficult or impossible.

One of the major concerns is bringing in transparency to prevent unfair commercial practices. At the same time, cross-selling facilitates service providers to use existing channels to reach out to those who are looking to buy insurance products. It is, however, necessary to ensure that the consumer is not put to any kind of disadvantage because of the packaging.

The suggestions may be mailed to [email protected] on or before 15th March, 2012.