Kathmandu. The code of conduct of insurance agents issued by the Nepal Insurance Authority (NIA) has proved to be weak to deal with the growing challenges with the development of technology. The authority has the responsibility to update the Insurance Act, 2079 to implement the Insurance Act, 2079, the provisions of the Insurance Regulations, 2079 and Insurance Directive-2078 to deal with the challenges seen due to digital media.
Misuse of Digital Media: Some insurance agents are using misleading terms such as discounts, freebies, special offers on social networks such as TikTok, Facebook and YouTube.
Violations of Existing Rules: TAG_CLOSE_span_47 Section 2.6 of the current Code of Conduct expressly prohibits a promise to pay any portion of one’s commission in order to lure customers. However, in the guise of digital medium, this rule has been directly violated by misinterpreting the policy by saying that only 4 years installment is sufficient to be paid or such a percentage bonus is fixed.
Artificial Intelligence (AI) and the Challenges of New Technologies: With the advent of AI technology and digital media making video editing easier, agents are able to spread misleading graphics, inaccurate calculators, and false information to create unhealthy competition, which is contrary to Section 2.7. But they do.
In order to regulate the growing influence of digital media and AI, it has become necessary to amend the Agent Code of Conduct. The authority should include some new provisions to control the misuse of social media and other digital media and protect the public from being victims of misinformation and fraud:
Guidelines on Social Media and Digital Promotion
Misleading words: Social media posts, videos or captions should be completely banned from using words that show financial inducements such as discounts, offers, bumper gifts, freebies, etc.
Disclosure Provision: This is just an example of when an agent posts information about the bonus or return of an insurance policy on a digital medium. It should be mandatory to include a clear disclaimer in the promotional material (video or picture) stating that the actual bonus will be in accordance with the company’s financial position and the approval of the authority.
Prior approval from the concerned company: No agent shall be allowed to sell insurance policies in public by making a plan or making videos on his or her own, except according to the approved guidelines of the insurance company affiliated to him or the materials certified by the marketing department of that company.
AI and Digital Content Accountability
If an agent advertises using AI-generated images, videos or AI Avatar, it must clearly state that it is AI-generated.
{{TAG_CLOSE_span_40 TAG_OPEN_span_40}} Full Responsibility for False Details: The concerned agent should take full legal and financial responsibility for any miscalculation or misleading claim shown to the customer using an AI tool or online calculator.
Digital Identity and Transparency
Digital License Display: Section 1.1 of the current Code of Conduct only provides for physical possession of a license. In the current situation where the use of digital technology has become prevalent, the agent should clearly mention his or her agent license number, the period of retention and the name of the insurance company in the profile of the social media used for business purposes.
Only accurate information: In accordance with the spirit of Section 1.2 of the current Code of Conduct, abusing other competitors on social media or keeping unconfirmed financial statements of one’s company should be completely prohibited.
Monitoring, Complaints, and Proceedings
{{TAG_OPEN_span_35} Digital Monitoring Unit: A separate unit should be formed within the Insurance Authority and arrangements should be made to monitor and monitor misleading advertisements related to insurance on social networks.
Punishment up to revocation of TAG_CLOSE_span_34 license: Section 3 (penal) of the Code of Conduct should be made more stringent and include strict legal provisions such as a heavy fine for the first time and revocation of the agent’s license if it is found that a customer has been cheated or misleading through digital means.
