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Monday, December 29, 2014

Clearly mention conditions, benefits of insurance products: IRDA

To help consumers guard against bogus claims being made by insurers, sector regulator IRDA has said the companies will have to clearly define conditions along with benefits and riders of products to customers.

Insurance Regulatory and Development Authority (IRDA), in its revised draft regulations on consumer protection, has also said that insurance companies must place all the product information in public domain. The regulator has also sought comments from the public and all stakeholders on the draft regulations on or before January 19, 2015.

“A prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover.

“Every insurer shall place in public domain complete details of product particulars of each and every product that was offered for sale by the insurer as it was filed and approved by IRDA,” said the draft regulations.

In case of life insurance products, they should clearly mention if it comes with profit or without profits and the riders on products shall be clearly spelt out with regard to scope of benefits, as per the draft norms.

Among others, it said the insurers should formulate an insurance awareness policy to educate customers, constitute a policyholder protection committee ensuring its proper functioning as well as formulate a grievance redressal policy for speedy resolution of grievances.

The draft has also suggested comprehensive, dispassionate and true information about products by the companies.

“The insurers shall ensure that the benefit/returns of the policy are not mis-stated/mis-represented or the prospect is not forced to buy a policy.

“Insurers shall disclose restrictions/conditions of all aspects of benefits that are material,” it added.

The draft norms further said that the products should suit policyholders with respect to income, personal and family circumstances, life stage, financial goals and risk appetite as the customer has the right to service of the proper kind.

It said that name and address of agent/insurance intermediary should also be mentioned in the policy document and premium receipts or any such communication.

The insurers, agents and intermediaries shall strictly adhere to IRDA advertisement regulations and shall not issue any misleading or unfair advertisement,” it added.

“Violations of any provisions of Advertisement Regulations and guidelines...shall be dealt with as per provisions of the relevant regulations/provisions of the Act,” it added.

IRDA said the revised regulations may be known as IRDA (Protection of Policyholder’s Interests) Regulations 2014 as and when they come to force.

Source : Thehindubusinessline


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