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Illustration: Ajay Mohanty
The Insurance Regulatory and Development Authority of India (Irdai) on Thursday asked insurance companies to enable their IT systems to interact with Digilocker, allowing policyholders to use the service effectively.
In its 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, the regulator consolidated policyholder entitlements into a single reference document and emphasised measures towards providing a 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.
According to the circular, both life and general insurers are mandated to provide an essential summary of important information at different stages of the 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.
Insurers have to provide a customer information sheet (CIS) for all insurance segments, outlining key policy features, benefits, and exclusions. The proposal form and CIS must be made available in regional languages upon the customer’s request.
Also, both life and general insurers will give policyholders a 30-day free look period to review the terms and conditions of the policy. The regulator also stated that insurance companies will not accept premium proposal deposits on life or health insurance policies along with the proposal form, except in cases where risk cover begins immediately on receipt of the premium.
Insurance companies must provide a search tool on their website to enable the verification of authorised distribution channels that can sell their insurance products. An assessment of suitability for life insurance is required for savings-related life insurance products and annuity products, excluding annuities purchased from the proceeds of the NPS and employer-offered superannuation funds.
Also, at the proposal form stage itself, insurers should collect nominee details, including bank account details, to facilitate prompt settlement of claims in case of the policyholder’s death.
First Published: Sep 05 2024 | 8:28 PM IST
