Irdai draft guidelines to safeguard insurance policyholder interests: 5 major changes proposed
Feb 15, 2024
Synopsis
In order to decrease stakeholder compliance requirements, facilitate company operations, and protect policyholder interests, the Insurance Regulatory and Development Authority of India (IRDAI) has suggested a number of changes.
The Insurance Regulatory and Development Authority of India (IRDAI) has recommended several modifications to promote business ease, minimise stakeholder compliance obligations, and safeguard policyholder interests.
According to the IRDAI circular dated February 14, 2024, “Following further deliberation draft Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024 is proposed to be issued which consolidates the provisions of the following 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;
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(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.
The following are some of the major changes proposed in the Irdai draft:
Protection of interest of policyholders:
1. Free Look Period
The free look period for insurance purchased through any channel is 30 days from the date of receipt of the policy document.
2. Bank details
In order to facilitate electronic transmission of refunds and payment of claims, the insurer must gather the insured's bank account information during the proposal stage.
3. Nomination mandatory
No policy in case of life insurance shall be issued unless nomination is obtained.
4. Nomination provisions
Nomination provisions relating to general, wherever applicable and health insurance policies introduced.
5. Electronic form
Insurance policies meeting the defined criteria to be issued in Electronic form.
Other proposal include
6 Advertisement:
The requirement of filing of advertisement with the Authority has been dispensed with;
7. Opening of place of business:
a. no prior approval requirement for insurers meeting the specified criteria;
b. An insurer having specified solvency ratio, profitability in 3 years out of 5 years and having satisfactory track record can now open foreign branch including office at IFSCA.
c. The returns specified for foreign branch office are dispensed with.
8. Outsourcing
a. Reporting Requirement: the existing requirement of reporting of outsourcing is dispensed with. Insurers are required to make necessary disclosures in this regard in its annual report.
[The Economic Times]
