The Insurance Regulatory and Development Authority of India (IRDAI) as part of steps towards reinforcing empowerment of policyholders has issued Master Circular on Protection of Policyholders¡¦ Interests under the IRDAI (Protection of Policyholders¡¦ Interests, Operations, and Allied Matters of Insurers) Regulations, 2024 replacing 30 circulars.
This circular consolidates policyholder entitlements into a single reference document and emphasizes measures towards providing seamless, faster and hassle-free claims settlement experience to a policyholder and enhance service standards, to foster a climate of trust and transparency within the insurance sector.
The Circular is divided into two sections.
- Section One: A policyholder/prospect who wishes to know a brief of important and relevant information at various stages of an insurance contract, may visit this section.
- Section Two: specifically focusses on broad requirements to be complied with by an insurer under the Regulations.
Key Features of the Master Circular:
1. Essential Information at various stages of insurance contract: The Circular provides a summary of essential information at various stages of an insurance contract. This includes guidance for prospects, policyholders and customers prior to sale, at the proposal stage, upon receiving policy documents, during the policy¡¦s term, and at the time of claim for all insurance segments (Life, General, and Health).
2. Customer Information Sheet (CIS): Insurers are mandated to provide a CIS for all insurance segments, detailing key policy features, benefits, and exclusions.
3. Regional Language Access: Proposal form and CIS must be made available in regional language upon request of the prospect/policyholder.
4. Free Look Period: 30-day Free Look period applies to both Life and Health insurance policies, allowing policyholders to review the policy terms and conditions.
5. Premium /Proposal Deposit: No premium / proposal deposit is required to be paid to the life /health insurer along with the proposal form except in case of policies where risk cover commences immediately on receipt of premium.
6. Verification Tool: Insurers must offer a search tool on their website enabling verification of authorised distribution channels who can sell their insurance products.
7. Assessment of suitability for life insurance is required to be done in case of savings related life insurance products and annuity products, except those annuities purchased from proceeds of NPS and from employer offered superannuation fund.
8. Nominee Details: Proposal forms to collect nominee details including bank account details, to facilitate prompt settlement of claims in the event of the policyholder¡¦s death.
9. Digilocker Integration: Insurers to enable their IT systems to interact with Digilocker allowing policyholders to use this service effectively.
10. Citizens¡¦ Charter: Each insurer must establish a Citizens¡¦ Charter specifying service standards.
11. Turnaround Times specified: Turnaround times are specified for policy processing and claim settlements.
12. Search and access unclaimed amounts: A claimant / policyholder can search for unclaimed amounts at Bima Bharosa website of IRDAI or from the website of the concerned insurer.
By implementing these measures, IRDAI continues to prioritize the interests of policyholders, advance transparency and efficiency of the insurance sector.
Master Circular can be accessed at IRDAI website at https://irdai.gov.in/web/guest/document-detail?documentId=5625747.
This is the second of the two Master Circulars issued under these Regulations. The first Master Circular was issued on 19th June 2024.
