- Insurance Regulatory and Development Authority of India (IRDAI) framed these regulations in exercise of powers under Insurance Act, 1938 and IRDA Act, 1999.
- Key highlights of regulation:
- It brings together 8 separate regulations into a unified and comprehensive framework.
- Objective: To ensure that the interests of policyholders are protected and insurers and distribution channel fulfil their obligations towards policyholders.
- Key measures for protection of interest of policyholders:
- The free-look period (period for returning policy without any penalties) shall be 30 days from date of receipt of policy document.
- For life insurance, compulsory gathering of nominee information at proposal stage.
- Policies to be offered in electronic format with measures for safeguarding data privacy.
- Insurers shall prevent mis-selling and unfair business practices.
- Every insurer shall have a system for registering and disposing of grievances in each of its offices.
- Challenges to insurance sector from policyholders’ perspective include:
- Low insurance penetration (4.2%) and insurance density ($91).
- Delays in processing of claim settlement.
- High premiums with 18% GST on insurance premium.
- Mis-selling of products with lack of awareness and knowledge of coverage.
Insurance Regulatory and Development Authority of India (IRDAI)
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