Since policyholders have other options for resolving their grievances, the Insurance Regulatory and Development Authority of India (IRDAI) excluded the retail segment of the general insurance market from the arbitration clause.
This means that only commercial business lines will be covered by the clause.
"Insurer's Grievance System, Insurance Ombudsman, and Consumer Courts, in addition to Civil Courts, available for redressal of their grievances or disputes," the regulator stated. "Retail or individual policyholders may be excluded from the provisions of the Arbitration Clause."
This ruling came about as a result of the IRDAI reviewing the Arbitration Clause after the Supreme Court had issued a referral on the subject.
The updated clause, which reads as follows: "The parties to the contract may mutually agree and enter into a separate Arbitration Agreement to settle any and all disputes related to this policy," will apply to all commercial line insurance following the revision.
The Arbitration and Conciliation Act of 1996's provisions will be followed and adhered to in conducting the arbitration.
According to the regulator, unless the policyholder requests that the commercial lines clause be substituted in its place, the clause will remain applicable to all current retail plans until the policy's term expires.
The clause will be deemed eliminated for all new retail policies, and it will remain applicable for all commercial policies from the date of renewal that falls on or after the circular's effective date.
