IRDAI draft guidelines: The Insurance Regulatory and Development Authority of India (IRDAI) has proposed a series of recommendations aimed at enhancing operational efficiency, reducing compliance burdens on stakeholders, and ensuring the protection of policyholders’ interests.
The IRDAI circular dated February 14, announces the proposal to issue the draft Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, which consolidates provisions from various existing regulations:
(i) The Insurance Regulatory and Development Authority (Manner of Receipt of Premium) Regulations, 2002;
(ii) The Insurance Regulatory and Development Authority of India (Places of Business) Regulations, 2015;
(iii) The Insurance Regulatory and Development Authority of India (Fee for registering cancellation or change of nomination) Regulations 2015;
(iv) The Insurance Regulatory and Development Authority of India (Fee for granting written acknowledgement of receipt of Notice of Assignment or Transfer) Regulations, 2015;
(v) The Insurance Regulatory and Development Authority of India (Issuance of e-Insurance Policies) Regulations, 2016;
(vi) Insurance Regulatory and Development Authority of India (Outsourcing of Activities by Indian Insurers) Regulations, 2017;
(vii) The Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests) Regulations, 2017;
(viii) (The Insurance Regulatory and Development Authority of India (Insurance Advertisements and Disclosure) Regulations, 2021.
ET quoted Apaar Kasliwal, Executive Director at PolicyBoss.com, as saying, “We are in the favour of making the free-look period to 30 days a standard for all the life insurance policies for the customers. We are confident that by extending the free look period to 30 days, it will allow ample time for policyholders to be thorough in their understanding given the pace of innovation in insurance products nowadays. Along with the 30 days period, we feel there should be a helpline of an expert panel given by insurance companies during those 30 days’ time where customers can call and clarify their doubts. This will help the customers to understand the policy dynamics directly from the insurers and clarify as required.”Here are the key changes proposed in the IRDAI draft guidelines:
- Extended Free Look Period: Policyholders will have a 30-day window from the receipt of the policy document to examine and evaluate their insurance coverage.
- Collection of bank details: Insurers are required to collect the bank account information of insured individuals during the proposal stage to facilitate electronic refunds and claims payments.
- Mandatory nomination: Life insurance policies cannot be issued without obtaining a nomination from the policyholder.
- Expanded nomination provisions: Nomination provisions will also apply to general and health insurance policies where applicable.
- Electronic policy issuance: Insurance policies meeting specified criteria will be issued in electronic form.
Other notable proposals include:
- Advertisement: The requirement for filing advertisements with the Authority has been done away with.
- Opening of place of business: Insurers meeting specific criteria will no longer require prior approval to open new branches, including foreign branches.
- Outsourcing reporting: The obligation to report outsourcing activities is removed, with insurers now required to disclose such activities in their annual reports.
