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Should the insurance firms be given access your credit data..??

Created by : Niranjan Meena, Actuary Manager, LIC  | 04 30 2009 05:49:43 +0000
Industry : InsuranceFunctional Area : Business Policy(Strategy & Execution)
Keywords : investment insurance insurance plans insurance advisor credit data access to credit data credit information
Activity:  150 views;  last activity : 07 06 2010 20:18:09 +0000

As a recent news in TOI says that the Information Bureau India Ltd (CIBIL), the country's first credit information bureau, has been granted 'in-principle approval' for Certificate of Registration by the Reserve Bank of India, which allows companies from telecommunications and insurance space to access credit data.

What is your take on it..??

Should they have the access to our Credit information..??

  
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Yes,

The CIBIL must be given the data, for the reason that the CIBIL gives credit reports and one can analyse the credit of an individual from the premium he/she pays...
By Japan Shah, Assistant Professor, Oxford School of Management  06 08 2009 15:57:18 +0000
 
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i agree with you on same but have one objection also why only private life insurance should be banned, all companies working insurance sector are corporate body and have  same common plateform.
By Dushyant Hada, Territory Manager  05 03 2009 17:46:06 +0000
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Dear Abhay,

For the wrong doings of Agent for what so everreasins  it might be should we  block/black out  a source of information which can act as a tool to assess the risk.

Let also understand the fact that the information so available is of  people/individuals who have availed credit facility.  So strictly speaking this info will enable in making an assessment of the financial status/ability of the propective Life assured or the propser to be able to pay up the premium.

Let us not try to obfuscate the risk of financial hazard with the  suppression of the material fact like having health related problems and delibrate attempt  to cheat an Insurance compan as because at the stage of claim assessment these facts do pop up not the finacial facts.

Let me cite an example A person might have taken huge amount of loans on various front and major portion of his income goes in paying up the EMI's. Now that person is under no obligation to disclose his expenditure to the Insurance firm, but from the person credit history the Insurance company can make as assessment of the risk of  default in paying the premium hence take an decision.

The argument can be so what if  policy gets lapsed in case of non-payment of premium then to counter this argument Insurance is long term plan and it only over a period time that the Insurance Company some money by having a regular premium policy in active state. 

 
By DEVRANJAN DASH, Zonal Marketing Manager, ICICI Bank  | 04 30 2009 11:07:46 +0000
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Yes the data should be shared. Benefits are

- The insurance companies would have the clear idea about the financial standing of the person insured..... based on which the premium can be fixed, higher the risk of default higher the premium...

- Unscruplous agents who book the premium for the sake of  mainitaining the agency would be eliminated.

- default customers if insured there could be lot of funds stocked with insureance companies which are of  no use to any body except the insurance companies.... even this could be avoided/

 

I believe strongly the data should be shared.......
By Ganesh Ramaswamy, Area Sales Manager - Mortgages, Bajaj Finance Limited  | 04 30 2009 11:02:51 +0000
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The reason for which the credit reports should be made accessible to Insurers so as to bolster the financial underwriting standards and hence avoid/reduce the risk of moral hazard based on Financial aspects.

Certain weightage can be alloted tounderstand the severity of various deviations if atall in the credit history of the potential customer and take decisions accordingly

As far as misuse of personal info is concerened then point is that this credit history is based on usage of certain products that are sold in the market place by private entities so how can the act of preventing the Private Insurance companies from accessing this data can be justified or tenable.
By DEVRANJAN DASH, Zonal Marketing Manager, ICICI Bank  | 04 30 2009 06:59:35 +0000
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I do not agree with the views of Devrajan Dash. As a prudent practice all underwriter should check out about the moral hazards of the insured by every mean but not from the body like CIBIL.

If you look at your proposal forms how many of agents are telling the facts of insured. Current scenario is insurance agent is more aware about moral hazard of proposed insured but due to commission he is not willing to share it with insurer. I can give ample examples to prove. 

Every company has different underwrinting guidelines and according to that they are doing business. Though sometime irrelevent information is ask which is nothing to do for the policy, but it is in the name of actuary. Can you stop this.

Instead of that first try to educate your agents and customer to make them understand what is insurance. From that only you can spread to the needy people. 

To find out moral hazard of insured you must have check on your own agents who's loyalty is not towards clients. In many cases we have done moral hazard checking before issuing policies. Every person can have different perception. So the view can vary from person to person.
By Abhay Pendharkar, Risk Management Consultant  | 04 30 2009 09:26:26 +0000
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The approval gives them the right to continue their operations and allows insurers to access the CIBIL database. According to me the insurance companies and specially private iinsurance companies should not be given access to the personal data of people..
By Niranjan Meena, Actuary Manager, LIC  | 04 30 2009 05:49:43 +0000
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