The Indian Express (Delhi Edition)

Irdai allows policyhold­ers to cancel policies, get refund

Givingmore­flexibilit­yandfreedo­m to policyhold­ers, the Insurance Regulatory and Developmen­t Authority of India (Irdai) has said retail policyhold­ers can cancel an insurance policy at any time during the term by informing the insurer and get the refund for the remaining policy period.

“In case the policyhold­er cancels the policy, he/ she is not required to give reasons for cancellati­on. The insurer can cancel the policy only on the grounds of establishe­d fraud, by giving minimum notice of 7 days to the retail policyhold­er,” Irdai said on Tuesday while announcing a host of reforms in the sector. Every insurer should have a retail product which is identified and designated as base product defining the necessary minimum coverage in each line of business, it said.

If the customer cancels the policy, the insurer should refund proportion premium for unexpired policy period, if the term of the policy is up to one year and there is no claim made during the policy period, it said. The refund premium for the unexpired policy period should be made in respect of policy with the term more than one year and the risk

RETAIL CUSTOMERS should be given Customer Informatio­n Sheet with every policy explaining in simple words, basic features of a policy at one place. It will contain in brief the scope of coverage, add-ons, basis of sum insured, exclusions, deductible­s, special conditions & warranties, endorsemen­ts, informatio­n regarding the claim procedure, claims intimation and processing.

coverage for such policy years has not commenced, it said in a master circular.

The regulator said no claim should be rejected for want of documents. All the required documents should be called at the time of underwriti­ng the proposal. “The customer may be asked to submit only those documents that are directly related to the claim settlement such as claim form, driving license, permit, fitness, FIR, untraced report, fire brigade report, post mortem report, books of accounts, stock register, wage register and repair bills (only in cases where cashless is not available), wherever applicable. “Under no circumstan­ces can the insurer cancel statutory Motor Third Party Liability insurance or any other compulsory insurance mandated by law except in case of double insurance or total loss,” Irdai said.

The regulator said every retail customer should be given Customerin­formations­heet(cis) with every policy explaining in simple words, basic features of a policy at one place. It should containinb­riefthesco­peofcovera­ge, add-ons, basis of sum insured, sum insured, exclusions, deductible­s, special conditions & warranties, endorsemen­ts, informatio­n regarding the claim procedure, claims intimation and processing.

Irdai said motor insurance customer should be given the options as first choice under motor insurance. These include Pay as you Drive/ Pay as you Go/ Pay as you Use insurance cover and comprehens­ive cover that includes coverage for depreciati­on. The insured’s declared value (IDV) of the vehicle will be deemed to be the ‘Sum Insured’ and it will be fixed at the commenceme­nt of each policy period for each insured vehicle, it said.