The insurance regulator yesterday issued an exposure draft of the proposed IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024 which consolidates and will supersede eight existing regulations.
The objective of the revamp is to enhance the ease of doing business and reduce the compliance burden for stakeholders while also ensuring that the interests of policyholders continue to be protected.
Some of the major changes in the exposure draft are:
Policyholder protection
a. 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.
b. To enable the electronic transfer of refund sand for payments of claims, insurers are to collect the details of bank accounts of the insured at the proposal stage.
c. No life insurance policy shall be issued unless a nomination is obtained.
d. Nomination provisions relating to general, wherever applicable and health insurance policies are introduced.
e. Insurance policies meeting the defined criteria are to be issued in electronic form.
Advertisements
a. The requirement of filing advertisements 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 the specified solvency ratio, profitability in three years out of five years and a satisfactory track record can now open a foreign branch including an office at the International Financial Services Centre.
c. The returns specified for foreign branch offices are dispensed with.
Outsourcing
a. The existing requirement of reporting outsourcing is dispensed with. Insurers are required to make necessary disclosures in this regard in their annual reports.
Feedback on the exposure draft is to be submitted to the IRDAI by 4 March 2024. The new regulation shall come into force from the date of its publication in the Official Gazette.