ISSN: 2249-7196 IJMRR/ November 2014/ Volume 4/Issue 11/Article No-7/1085-1090 P. Vinotha et al./ International Journal of Management Research & Review CONSUMER PROTECTION IN PACL WITH SPECIAL REFERENCE TO INSURANCE IN KURINJIPADI ABSTRACT R. Suriya 1, P.Vinotha* 1 1 Asst. Prof, EGS Pillay Engineering College, Nagapattinam, India. The study attempts to analyze the Consumer protection provided by the insurance company using the following criteriasa) Transparency of information b)understandability of information and d) Service offered by PACL.The inferences were drawn out with the help of the statistical analytical tools. From the findings few recommendable suggestions has provided to the company to realize, understand and recognize Consumer Protection and start developing concepts and create products that are oriented to consumers. Keywords: Consumer, Consumer protection, Transparency, Understandability, Service. 1. INTRODUCTION Consumers play a vital role in the economic system of a nation because in the absence of effective demand that emanates from them, the economy virtually collapses. Mahatma Gandhi said, "A consumer is the most important visitor on our premises. But, of late, unfortunately cheating by way of overcharging, black marketing, misleading advertisements, etc has become the common practice of greedy sellers and manufacturers to make unreasonable profits. In this context, it is the duty of the government to confer some rights on consumers to safeguard their interests. The Consumer Protection Act 1986 is a social welfare legislation which was enacted as a result of widespread consumer protection movement. The main object is to provide speedy and inexpensive redressal to the grievances of consumers. Insurance Regulatory and Development Authority (IRDA) Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA has the power to frame regulations under Section 114A of the Insurance Act. 2. RESEARCH FRAMEWORK Problem Definition Insurance has never been a product that buyers clamored for. It was a product that was pushed often by a neighborhood friend, who joined as an Agent to raise his family income. *Corresponding Author www.ijmrr.com 1085
Those Agents marketed Insurance as a tax saving tool with the hint of some money coming back to you after a few years. This is still now continuing in market. Because of this only sales of industry are raising in March every year. The core of insurance product is the protection element that offers a hedge against uncertainty caused by loss of life of the breadwinner.each year the global economy adds an estimated 150 million new consumers of financial services. Protecting the interests of Consumers has become an important component of financial market particularly in rural areas where the peoples are having less knowledge about Insurance market. So, this study is to examine the level of Consumer Protection towards Insurance in rural area. Scope The study helps insurance industry to understand about the necessity of consumer protection, to create awareness among consumers about the protection against their investment, to provide a new impetus to company for conducting consumer protection programs. Thisstudy will be a base for future researches on Consumer Protection in Insurance. Objectives of the study To know the Transparency of information provided by PACL. To analyze the Understandability of information provided by PACL. To examine the Service Offered by PACL. Research Methodology Descriptive Research Descriptive research is a research in which the research may try to describe a single event or characteristic through distribution or may try to relate a few events or variables through statistical analysis. Sample size A sample size of 75 is selected for the study from the PACL customer for the analysis of consumer protection in Kurinjipadi, where the populationis 600 approximately. Type of Data Both the primary and secondary data are used for collection of data for the study of consumer protection in PACL. Questionnaire The questionnaire consists of Dichotomous question, Multiple choice with single response question, Likert scale and Open ended question Tools Used For Analysis The collected data using the printed questionnaire are analyzed using the statistical tools like Chi-square, Correlation and Weighted Average Method. Copyright 2012 Published by IJMRR. All rights reserved 1086
3. REVIEW OF LITERATURE According to IRDA Annual Report 2009-10protection of policyholder Interest and also to empower consumer by educating them regarding details of the procedures and mechanisms that are available for grievance redressal. Policyholders must be provided with inexpensive and speedy mechanisms for complaints disposal According torodney Lester, Formal Disclosure means Insurers should be legally responsible for all statements made in marketing and sales materials they produce related to their products. All marketing and sales materials should be easily readable and understandable by the general public. Sales Practice means, Sales personnel and intermediaries selling and advising on insurance contracts should have sufficient qualifications, depending on the complexities of the products they sell. Insurers should be held responsible for product related information provided to consumers by their agents. The consumer should be made aware of whether the intermediary selling them an insurance contract is acting for them or for the insurer. According to Financial Literacy Survey 2008,conducted in Russiashowed that half the respondents considered their level of financial literacy as unsatisfactory. Over 80% were unable to correctly answer five out of six basic financial questions. 4. ANALYSIS AND INTERPRETATION Statistical tool 1: Chi-Square Analysis, to analyze the significant relationship between Educational Qualification of the respondents and their satisfaction level regarding the Service Offered by PACL Opinion HS S N D HD Total School level 6 6 10 9 0 31 Diploma 3 5 5 3 0 16 Graduate 2 7 5 2 0 16 Post Graduate 2 5 2 0 0 9 Professional 1 0 1 1 0 3 TOTAL 14 23 23 15 0 75 HS = Highly satisfied, S = Satisfied, N = Neutral, D = Dissatisfied and HDS = Highly Dissatisfied. Expected count Opinion HS S N D HD Total School level 5.79 9.51 9.51 6.2 0 31 Diploma 2.99 4.91 4.91 3.2 0 16 Graduate 2.99 4.91 4.91 3.2 0 16 Post Graduate 1.68 2.76 2.76 1.8 0 9 Professional 0.56 0.92 0.92 0.6 0 3 TOTAL 14 23 23 15 0 75 Copyright 2012 Published by IJMRR. All rights reserved 1087
Expected count = Row Total * Column Total Grand total O E O - E (O - E) 2 (O - E) 2 /E 6 5.79 0.21 0.04 0.007 6 9.51-3.51 12.67 2.11 10 9.51 0.49 0.24 0.024 9 6.2 2.8 7.84 0.87 3 2.99 0.01 0.0001 0.00003 5 4.91 0.09 0.008 0.002 5 4.91 0.09 0.008 0.002 3 3.2-0.2 0.04 0.01 2 2.99-0.99 0.98 0.49 7 4.91 2.09 4.39 0.62 5 4.91 0.09 0.008 0.002 2 3.2-1.2 1.44 0.72 2 1.68 0.32 0.10 0.05 5 2.76 2.24 5.02 1.004 2 2.76-0.76 0.58 0.29 0 1.8-1.8 3.24 0 1 0.56 0.44 0.19 0.19 0 0.92-0.92 0.85 0 1 0.92 0.08 0.006 0.006 1 0.6 0.4 0.16 0.16 (O - E) 2 /E=6.56 Tabulated value for16 d.f @ 5 % level of significance is 26.296. Calculated value is lesser than tabulated value at 5% significant level. Therefore, null hypothesis (Ho) is accepted. Statistical tool 2: Correlation analysis, to analyze the opinion of respondents regarding the information provided by the agent and the satisfaction level of respondents regarding the service offered by PACL using correlation method. OPINION FACTORS HS S N D HDS TOTAL Information provided by the agent (x) 18 25 25 7 0 75 Satisfaction level (y) 14 23 23 15 0 75 Co-efficient of correlation (r) = 0.910 X Y XY X 2 Y 2 18 14 252 324 196 25 23 575 625 529 25 23 575 625 529 7 15 105 49 225 75 75 xy=1507 x 2= 1623 y 2= 1479 Copyright 2012 Published by IJMRR. All rights reserved 1088
Statistical tool 3: Weighted average method, to know about of ranking given by respondent regarding Understandability of Information, Transparency of Information, Time of Maturity, Claims and Settlements and Grievance Redressal. OPINION HS S N DS HDS TOTAL FACTORS Understandability of Information (X 1 ) 15 26 27 7 0 75 Transparency of Information (X 2 ) 12 34 21 8 0 75 Time of Maturity (X 3 ) 16 25 23 11 0 75 Claims and Settlements (X 4 ) 14 25 24 12 0 75 Grievance Redressal (X 5 ) 13 17 27 18 0 75 Factors Understandability of Information Transparency of Information Time of Maturity Claims and Settlements Grievance Redressal RANK W X1 WX1 X2 WX2 X3 WX3 X4 WX4 X5 WX5 HS 1 5 15 75 12 60 16 80 14 70 13 65 S 2 4 26 104 34 136 25 100 25 100 17 68 N 3 3 27 81 21 63 23 69 24 72 27 81 DS 4 2 7 14 8 16 11 22 12 24 18 36 HDS 5 1 TOTAL 75 274 75 275 75 271 75 266 75 250 CW 3.65 3.67 3.61 3.55 3.33 RANK 2 1 3 4 5 5. RESULTS AND DISCUSSION Inference 1 From Chi- square analysis it is inferred there isno significance relationship between Educational Qualification of the respondents and their satisfaction level regarding the service offered by PACL. Inference 2 From Correlation analysis the Co-efficient of correlation (r) is 0.910 which is almost nearer to 1, it means that both the variables are strongly correlated. So, the information provided by the agent and the Satisfaction level of respondents regarding the Service Offered by PACL is strongly related. Inference 3 From Weighted Average analysis it is inferred that the respondents ranks Transparency of informationas first, and Grievance redressal as last. 6. SUGGESTIONS OF THE STUDY PACL must provide the terms of condition in a better understandable way. Since, most of the consumers are Agriculture and have their Education upto School level only. PACL must take better care to reduce the shortage in service which paves way for customer satisfaction. The company must educate the consumer about Consumer Protection. Copyright 2012 Published by IJMRR. All rights reserved 1089
7. CONCLUSION The researcher had undertaken a systematic analysis on consumer protection in PACL with special reference to insurance in Kurinjipadi. The researcher found that overall consumer protection was satisfied. The company tries it best to offer better service. However further improvements as per suggestions will yield effective results. The company should provide Education and Awareness about Consumer Protection then the consumers know the need and importance of Consumer Protection in Insurance. This study will be a base for future researches on Consumer Protection in Insurance. REFERENCES Pathak A. Legal Aspects Of Business, MC Graw Hill, 2010; 4. IRDA Annual Report 2009-10: 30-33. Lester R. Consumer Protection Insurance, Non-Bank Financial Institutions Group, Global Capital Markets, Development Department Financial And Private Sector Development. Vice Presidency Primer Series On Insurance,August 2009; 7: 11-13. Sherlekar SA. Marketing Management, Himalaya Publishing House, 2007; 13. Tennyson S. State Regulation and Consumer Protection in the Insurance Industry, February 2008. Copyright 2012 Published by IJMRR. All rights reserved 1090