In a significant move to streamline insurance regulations and enhance policyholder protection, the Insurance Regulatory and Development Authority of India (IRDAI) has announced the draft of the “IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024.” This initiative is part of IRDAI’s ongoing efforts to revise regulations to facilitate easier business operations and reduce compliance burdens while safeguarding policyholder interests.
The draft regulations are a consolidation of eight existing regulations ranging from premium receipt manners, and business location requirements, to e-insurance policy issuance and insurance advertisements. This unified regulation aims at bolstering policyholder rights and streamlining insurer operations.
Key highlights of the proposed regulations:
- Free Look Period: The free look period for the policies, obtained through any mode, shall be 30 days from the date of receipt of the policy document.
- In order to enable electronic transfer of refund and for payments of the claims, the insurer is to collect the details of bank accounts of the insured at the proposal stage.
- No policy in the case of life insurance shall be issued unless a nomination is obtained.
- Nomination provisions relating to general, wherever applicable, and health insurance policies introduced.
- Insurance policies meeting the defined criteria to be issued in electronic form.
- The requirement of filing of advertisement with the Authority has been dispensed with.
- Opening of place of business: a. no prior approval requirement for insurers meeting the specified criteria; b. An insurer having a specified solvency ratio, profitability in 3 years out of 5 years, and a satisfactory track record can now open a foreign branch including an office at IFSCA. c. The returns specified for foreign branch offices are dispensed with.
- The existing requirement of reporting outsourcing is dispensed with. Insurers are required to make necessary disclosures in this regard in their annual report.
The IRDAI has invited stakeholders to submit their comments and suggestions on the draft regulations by March 4, 2024.
