IRDA works as regulator of Insurance Business in India and keep revising its policies to safeguard interest of Policy Holder. Moreover, they keep releasing Public Interest campaigns on all media. For last 10 years, they had been telling all public that IRDA does not call any Policy Holders. In spite of this, public falls to the trap and looses their hard earned money.

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IRDA (Protection of Policyholders' Interests) Regulations, 2017

In 2017, IRDA released their new regulation for protection of Policy holders. Key highlights of the revised regulations are given below:

  1. Each Insurer would have a Board Approved policy to protect interest of Policy Holder. This policy would have specific action points for awareness, grievance registration and turnaround time. Each Insurer would have a standard policy on grievance redressal and same should be available on website. Each office of Insurer should have name of Grievance Officer on display.
  2. All Insurance product should have a unique Identification number. All features and benefits should be clearly explained.
  3. To curtail rider additions, IRDA regulation says that premium of all riders cannot exceed 30% of base premium. Sum assured on rider cannot exceed the base sum assured.
  4. An insurer or intermediary must offer all transparent information under the preview that Insurance is a matter of solicitation.
  5. If Proposal Form is not filled by Proposer then intermediary must collect a certificate from Proposer that all contents has been understood.
  6. As maximum mis-selling of insurance takes place in this form hence the policy is being written verbatim: “The Insurers shall ensure, that a sale executed over distance-marketing modes such as Internet, SMS, Tele Marketing, interactive electronic medium etc., shall be undertaken by authorized and qualified sales persons who are specified in this behalf by the Authority. It is mandatory that the consent of the prospect be obtained before canvassing. Care should be exercised to ensure that the prospect contacted has clarity as to the identity of the insurer, the distribution channel, the product, benefits and conditions of offer etc. The canvassing so made shall not involve compulsion, inconvenience or nuisance of any kind to the prospect.”
  7. All proposal should be submitted in approved forms and Insurer should send a Policy Document within 30 days of acceptance of Proposal.
  8. All life Proposer should be told provisions of section 45 i.e indisputability after 2 years and provisions of section 39 for nomination.
  9. All balance money should be transferred back to proposer within 15 days. Insurer cannot keep any suspense money for over 15 days.
  10. All policy details including details of intermediary must be mentioned on Proposal Form.
  11. All provisions of surrender, lapse, and termination should be mentioned in Policy Document.
  12. All provisions of free look cancellations should be mentioned.

Even in General Insurance contract, Insurers are regulated and have to provide all details in Policy Documents.

Moreover, IRDA has an IGMS system where all policyholders can register the insurance complaint. All Insurers are bound to offer a reply within a stipulated time frame.

IRDA is many extra efforts through campaigns, regulations and IGMS for the protection of interest of Policy holders.

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