![Irdai said this is an important step in a series of reforms being taken by the insurance regulator, which has the interests of policyholders at its core. Irdai said this is an important step in a series of reforms being taken by the insurance regulator, which has the interests of policyholders at its core.](https://images.news18.com/ibnlive/uploads/2021/07/1627283897_news18_logo-1200x800.jpg?impolicy=website&width=510&height=383)
Irdai said this is an important step in a series of reforms being taken by the insurance regulator, which has the interests of policyholders at its core.
Irdai said the free look period, which gives time to review policy terms and conditions, has been increased from 15 days previously to 30 days.
Insurance regulator IRDAI on Wednesday announced that all life insurance savings products must include a policy loan option to enable policyholders to access liquidity when needed.
The Insurance Regulatory and Development Authority of India (IRDAI), in its master circular consolidating all regulations related to life insurance, has announced that the free inquiry period for policyholders to review their policies has been extended from 15 to 30 days.
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The latest master circular follows similar activity by the regulator for general insurance policies.
“This is an important step in a series of reforms being taken by an insurance regulator that has the interests of policyholders at its core. An environment is now created that is conducive to fostering innovation and improving customer experience and satisfaction,” IRDAI said.
According to the master circular, partial withdrawals are allowed on annuity products to enable policyholders to meet specific financial needs for important life events such as higher education or marriage of a child. Buying/Building a Residential Home/Apartment; Medical expenses, treatment of serious illness.
IRDAI said that in case of cancellation of an insurance contract, reasonableness and value for money must be ensured for both the canceling policyholder and the existing policyholder.
Additionally, the regulator said a strong system should be put in place to address policyholder grievances.
“If the insurer does not appeal the decision of the Insurance Ombudsman and fails to do so within 30 days, a fine of Rs 5,000 per day will be imposed on the complainant,” the circular states.
Insurance companies have also been asked to put in place mechanisms to improve continuity, curb mis-selling, prevent financial losses for policyholders and enhance long-term benefits.
Non-life insurance companies cannot reject claims due to lack of documentation.
IRDAI on Tuesday said non-life insurance companies cannot reject claims due to lack of documentation.
The 13 general basic circulars regarding non-life insurance business will also be abolished.
IRDAI said it has now been able to provide easy-to-understand insurance products tailored to the individual needs of customers, providing them with a variety of choices and improving their insurance experience.
“No claim can be denied for lack of documentation. When accepting a proposal, you will need to request the necessary documents. Customers may be asked to submit only the documents necessary and relevant for settlement of the bill (if cashless services are not available),” the circular said.
Additionally, retail customers may cancel their policy at any time by notifying their insurer. The insurance company can only cancel the policy if fraud is proven.
In the event of cancellation, insurers must refund pro rata premiums for the unexpired policy period, the circular said.
IRDAI has also provided a strict timeline for settlement of claims, including appointment of surveyors and submission of reports.
(including PTI input)