The Insurance Regulatory and Development Authority of India (IRDAI) has issued a master circular as part of its moves towards reinforcing empowerment of policyholders.
This circular, released on 5 September, 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 enhances service standards, to foster a climate of trust and transparency within the insurance sector.
The Circular is divided into two sections:
-
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.
-
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 the 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 the regional language upon request of the prospect/policyholder.
4. Free-Look Period: A 30-day free-look period applies to 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 that 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 funds.
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 the Bima Bharosa website of IRDAI or from the website of the concerned insurer.
The master circular can be found on this webpage.