Irdai claims that proposed regulations aim to revolutionize India's insurance landscape by bolstering policyholder protection and streamlining insurer operations. Stakeholders are encouraged to provide feedback before March 4th to ensure the final regulations reflect the interests of all parties involved.
The Insurance Regulatory and Development Authority of India (Irdai) has recently introduced a draft for the Irdai (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, according to an Irdai exposure draft issued on February 14. It claims that this draft aims to revolutionize the insurance landscape in India by streamlining regulations, enhancing policyholder protection, and facilitating smoother operations for insurers.
Here's what you need to know about the proposed changes:
Simplified Structure: The proposed regulations are divided into two main parts: Part A focuses on protecting the interests of policyholders, while Part B covers operational and allied matters of insurers. This clear division ensures a comprehensive approach to both policyholder protection and insurer operations.
Enhanced Policyholder Protections:
Extended Free Look Period: The free look period for policies will now be uniformly set at 30 days from the receipt of the policy document, regardless of the mode of acquisition. This provides policyholders with ample time to review their policies and make informed decisions.
Nomination Requirements: To ensure comprehensive coverage, no life insurance policy can be issued without obtaining a nomination. Additionally, nomination provisions are introduced for general and health insurance policies where applicable, further safeguarding policyholders' interests.
Electronic Policy Issuance: Insurance policies meeting defined criteria will now be issued in electronic form, promoting efficiency and accessibility for policyholders.
Streamlined Operations For Insurers:
Advertisement Requirements: The need for filing advertisements with the authority is eliminated, reducing administrative burdens on insurers.
Opening Of Business Places: Insurers meeting specified criteria will no longer require prior approval to open places of business. Moreover, those with a strong financial standing and a satisfactory track record can establish foreign branches, including offices at IFSCA, without the need for specific returns.
Outsourcing Reporting: The requirement for reporting outsourcing activities is removed. Instead, insurers are directed to disclose such activities in their annual reports, fostering transparency while reducing regulatory paperwork.