IRDA proposes more ‘free-look’ time to insurers

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To give more time for customers to read the fine print of an insurance policy, the regulator, Insuranace Regulatory Authority of India (Irda) has proposed to increase the “free-look” period for return of the policy. The period is proposed to be raised to 30 days from the 15 at present for all policies. Also nominations has been mandatory for life policies.

The policyholder can return the policy and opt out if he or she is not satisfied with any of the terms and conditions mentioned from the date of receipt of policy document, by stating the reasons for the objection.

In a draft Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, Irdai proposed to consolidate several provisions of the different laws related to insurance.

“Nomination provisions relating to general, wherever applicable, and health insurance policies (have been) introduced,” it said.

For the electronic transfer of refund and for payments of claims, the draft said the insurer should collect details of bank accounts of insured at the proposal stage itself.

To promote ease of doing business, Irdai also proposed to dispense the requirement of filing of advertisement by insurers with the authority.

The draft further said an insurer having specified solvency ratio, profitability in three years out of five and having a satisfactory track record can now open a foreign branch.

The regulator has invited comments from stakeholders by March 4, 2024. The draft follows recommendations of Regulations Review Committee (RRC) comprising members of insurance councils.

(With inputs from PTI)