IRDAI’s draft guidelines to protect insurance policyholders: 5 key changes to know | Business

Feb29,2024



IRDAI Draft Guidelines: The Insurance Regulatory and Development Authority Government of India (IRDAI) has proposed a series of recommendations aimed at increasing operational efficiency, reducing compliance burden stakeholdersand ensure the safety of interests of policyholders,
The IRDAI circular dated February 14 has announced the proposal to issue draft Insurance Regulatory and Development Authority of India (Protection of Interests of Policyholders and Allied Matters of Insurers) Regulations, 2024, which consolidates the provisions of various existing regulations:
(i) Insurance Regulatory and Development Authority (Manner of Receiving Premium) Regulations, 2002;
(ii) Insurance Regulatory and Development Authority of India (Places of Business) Regulations, 2015;
(iii) Insurance Regulatory and Development Authority of India (Fees for cancellation or filing of change of nomination) Regulations 2015;
(iv) Insurance Regulatory and Development Authority of India (Fees for giving written acknowledgment of notice of assignment or transfer) Regulations, 2015;
(v) Insurance Regulatory and Development Authority of India (Issue of e-Insurance Policies) Regulations, 2016;
(vi) Insurance Regulatory and Development Authority of India (Outsourcing of Activities by Indian Insurers) Regulations, 2017;
(vii) Insurance Regulatory and Development Authority of India (Protection of Interests of Policyholders) Regulations, 2017;
(viii) (Insurance Regulatory and Development Authority of India (Insurance Advertisement and Disclosure) Regulations, 2021.
“We are in favor of making the free-look period of 30 days standard for all life insurance policies for customers,” ET quoted Apar Kasliwal, executive director, PolicyBoss.com, as saying. We believe that by expanding this free look period Up to 30 days, this will give policyholders enough time to fully understand their understanding given the pace of innovation in insurance products nowadays. We believe that along with the 30 day period, there should also be a helpline of an expert panel provided by the insurance companies during those 30 days time, where the customers can call and get their doubts resolved. This will help customers understand the policy dynamics directly from insurers and provide clarifications as required.”
The major changes proposed in the IRDAI draft guidelines are as follows:

  • Extended Free Look Period: Policyholders will have 30 days from receipt of the policy document to check and evaluate their insurance coverage.
  • Collection of Bank Details: Insurers are required to collect bank account information of insured persons during the proposal stage to facilitate electronic refunds and claims payments.
  • Compulsory Enrollment, Life insurance policies cannot be issued without obtaining nomination from the policyholder.
  • Extended Nomination Provisions: Nomination provisions will also apply to general and health insurance policies where applicable.
  • Issuance of Electronic Policy: Insurance policies meeting the specified criteria will be issued in electronic form.

Other notable proposals include:

  • Advertisement: The requirement of filing advertisement with the authority has been abolished.
  • Opening of business place: Insurers meeting specific criteria will no longer require prior approval to open new branches, including overseas branches.
  • Outsourcing Reporting: The obligation to report outsourcing activities has been removed, with insurers now required to disclose such activities in their annual reports.



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