The Insurance Regulatory and Development Authority of India (IRDAI) has engaged the Institute of Public Auditors of India to study and monitor the use of dark patterns by insurers over the next nine months. This move follows an April directive instructing insurers to comply with Central Consumer Protection Authority (CCPA) guidelines on dark patterns, conduct self-assessments within 15 days, and submit action plans for any compliance gaps, according to medianama.com.
The audit initiative was prompted by a LocalCircles survey of over 87,000 insurance customers across 341 districts, which revealed widespread use of dark patterns. The survey found that 85% of respondents said insurers forced them to share excessive personal data, up from 57% two years ago. Additionally, 80% reported difficulties cancelling policies, 90% faced persistent marketing calls and messages even after cancellation attempts, and 82% noticed discrepancies between advertised and actual pricing or terms. IRDAI Chairman Ajay Seth highlighted that requiring customers to provide personal information before showing a quote constitutes a dark pattern in itself.
This regulatory action underscores growing concerns about consumer protection in the insurance sector. The IRDAI's April directive aligns insurers with CCPA guidelines, aiming to curb manipulative practices that hinder transparency and customer autonomy. The audit marks an escalation from self-regulation to formal oversight, reflecting the sector's challenges in addressing consumer grievances. The findings from the LocalCircles survey provide empirical evidence of these issues, emphasizing the need for stricter enforcement.
The Institute of Public Auditors of India will conduct the audit over nine months, tracking insurers' compliance with dark pattern guidelines. The IRDAI's efforts follow the April directive and the survey results, signaling a regulatory push to improve transparency and consumer rights in India's insurance market.