Background:
The issuance of IRDAI (Insurance Product) Regulations, 2024 and the de-notification of erstwhile tariffs, general terms and conditions; policy and endorsement wordings provide a unique opportunity to develop simplified and easy-to-understand insurance products tailored to meet individual needs of the customers, providing them with ample choices and enhancing their insurance experience.
Scope and Applicability:
1. This Master Circular comes into force immediately.
2. It replaces all earlier Guidelines/Circulars related to General Insurance Products listed in Annexure C.
3. This Master Circular provides guidance on the operational aspects relating to general insurance products subsequent to the notification of IRDAI (Insurance Products) Regulations 2024.
4. It applies to every existing general insurance product, every add-on cover, and the general insurance coverage section within a Package Product but not to health insurance products within a package product.
5. Insurers can offer new, innovative, and customized products under the new product regulations to existing customers.
6. All Circulars/Guidelines issued in furtherance of any judicial order shall continue to be effective unless specifically modified or repealed.
Chapter I: General Information for a Retail Policy Holder/Customer
1. Product Availability:
Insurers must make available products/add-ons that provide wider choice to retail policyholders, covering assets, risks, properties, liabilities, etc., for individuals, farmers, MSMEs, and other retail segments.
Products must be easy to understand, in simple language, and offer flexibility for customization.
Documentation should ensure that no claim is rejected for want of documents that should have been collected at the time of underwriting.
2. Customer Information Sheet (CIS):
Every retail customer must receive a CIS with each policy, explaining in simple words the basic features of a policy.
CIS should include information on coverage, add-ons, exclusions, claim procedures, policy servicing, and grievance redressal mechanisms.
3. Claims and Grievance Redressal:
Insurers must inform retail customers about the timelines for claim settlement.
The appointment of surveyors must happen within 24 hours of a claim report.
Claims must be decided within seven days of receipt of the survey report.
Insurers are liable to a penalty for delays in claim settlement beyond the stipulated timelines.
Chapter II: Insurers – General Principles
1. Board Approved Policies and Procedures:
Insurers must have Board Approved Underwriting Policies, claims and policy servicing manuals, and standard operating procedures.
2. Training and Technology Enablement:
Periodical training must be provided to intermediaries and employees on products, regulations, and service timelines.
Insurers must implement end-to-end technology solutions to ensure seamless policyholder onboarding, policy servicing, renewal, claim settlement, and grievance redressal.
Chapter III: Product Management
1. Product Development:
Products should be need-based, avoiding unnecessary coverages while ensuring affordability and suitability.
The terms and conditions must be fair, reasonable, and compliant with various laws and regulations.
2. Product Approval Process:
The Product Management Committee (PMC) is responsible for ensuring compliance with the legal and regulatory framework.
Insurers must submit a certificate signed by the CEO in the standard format as given in the Master Circular on Submission of returns.
Retail Products’ documentation must be uploaded on the insurer’s website before launch or within seven days of UIN allotment.
Chapter IV: General Guidelines – All Lines of Business
1. Risk Classification:
General Insurers must ensure that all risk-level information is organized to be collated/aggregated by specific criteria, including Retail Product, Commercial Product, Group Business, etc.
2. Acceptance of Risk:
Underwriting evaluations must be guided by the Board-approved underwriting and risk management policy, consistent with reinsurance treaties.
3. Policy Duration:
General Insurance policies may be issued on an annual, long-term, or short-term basis.
4. Annual Performance Review:
The Product Management Committee must put in place a program for annual performance review of every Product and Line of Business, approved by the Board.
Chapter V: Specific Lines of Business
1. Motor Insurance:
Coverage under Motor Third Party Liability insurance must comply with the Motor Vehicles Act 1988.
Premium rates for Motor Third Party Liability insurance continue to be regulated by the Act.
Settlement of Total Loss/Constructive Total Loss claims must be determined by criteria set by the PMC and published on the insurer’s website.
2. Surety Insurance:
Surety Insurance contracts must not cover Financial Guarantees or be issued for assets/commitments outside India.
3. Trade Credit Insurance:
Protects businesses against non-payment for goods and services, typically covering a portfolio of buyers.
Insurance Surveyors
1. Role and Responsibilities:
Surveyors are responsible for impartial and accurate evaluation of claims exceeding Rs 50,000 for motor insurance and Rs 1 lakh for other insurance.
2. Performance Monitoring:
Insurers must have Board approved criteria for monitoring the performance of surveyors, ensuring timely and accurate survey reports.
3. Allocation of Survey Jobs:
A tech-based approach must be used for random and unbiased allocation of survey jobs to surveyors, ensuring transparency and efficiency.
4. Reporting Requirements:
Surveyors must submit their reports within fifteen days of allocation, with insurers deciding claims within seven days of receiving the report.
This detailed summary covers the essential points, facts, figures, and data provided in the Master Circular on General Insurance Business, ensuring comprehensive understanding and compliance for all stakeholders in the general insurance industry.
