The Insurance Regulatory and Development Authority of India (IRDAI) has rolled out a master circular for 2024 focusing on the Protection of Policyholders' Interests. This circular puts together all the important rules to safeguard policyholders in one place. It’s aimed at making claims easier and faster for policyholders, while raising service standards to build trust and transparency in the insurance industry.
Key Highlights:
· Both life and general insurers are required to give customers a summary of important details at different stages of an insurance contract. This includes providing guidance to prospects and customers before the sale, at the proposal stage, when policy documents are issued, during the policy term, and at the time of claim across all insurance categories.
· Insurers must provide a Customer Information Sheet (CIS) for all insurance types. The CIS will outline key features, benefits, and exclusions. Both the proposal form and CIS must be available in regional languages if requested by the customer.
· A 30-day free look period is provided for Life and Health insurance policies, giving policyholders a chance to go over the terms and conditions.
· No premium payment is required at the time of submitting the proposal form for Life and Health insurance, except for policies where risk cover starts immediately after receiving the premium.
Insurance companies are now required to provide a search tool on their websites to help customers verify authorized distribution channels that are approved to sell their insurance products. This tool ensures that customers are dealing with genuine agents or intermediaries.
All insurance policies must now be issued in electronic format, making it convenient for customers to receive and sign their policies digitally. However, if a customer prefers a physical copy of their policy, they can request the insurance company to issue it in that format as well.
Documents Required for Life Insurance Policies:
The insurance company is required to issue a life insurance policy within 15 days of accepting the proposal form. Along with the policy, the policyholder should receive the following documents:
1. Covering Letter: A letter accompanying the policy document, informing the policyholder about the free-look period during which they can review the policy and decide whether to continue or opt-out.
2. Policy Document: This is the official contract between the insurer and the policyholder, detailing the terms and conditions of the policy.
3. Copy of the Proposal Form: A duplicate of the original form that the customer submitted when applying for the policy.
4. Benefit Illustration: A detailed breakdown of the policy's benefits, showing how the policy is expected to perform over time and the financial benefits it offers.
5. Customer Information Sheet (CIS): A summary of important information regarding the policy, including key features, benefits, and exclusions.
6. Need Analysis Document (if applicable): This document is provided if the insurer conducted a suitability assessment to understand the customer’s insurance needs.
7. Any Other Required Documents: Depending on the specific insurance product, the insurer may provide additional documents.
This process ensures clarity and transparency for customers when purchasing life insurance policies, giving them all the necessary documents and information to make informed decisions.
The Customer Information Sheet (CIS) is a mandatory document that insurers must provide to all policyholders. This document offers a concise summary of the policy's main features, ensuring transparency and helping customers understand their coverage better.
As per regulations, the CIS for life insurance policies must follow the format specified in ‘Schedule D’ of the Insurance Act. This standardization guarantees consistency across insurers and makes it easier for policyholders to comprehend the details of their policy.
Key Information in a CIS
Type of Insurance: Clearly indicates the kind of policy, whether it’s a term life insurance, whole life, or any other type of coverage.
Sum Assured: The amount that will be paid to the beneficiary if a claim is made, ensuring policyholders understand the financial coverage they are entitled to.
Benefits: A detailed description of the coverage provided under the policy, so policyholders are aware of what is included.
Exclusions: Lists the specific situations or events that the policy does not cover, helping to avoid misunderstandings during claim settlement.
Important Details: This section includes vital information like:
Free look period: The time frame within which policyholders can review and cancel the policy if unsatisfied.
Policy renewal date: The date by which the policy needs to be renewed.
Options like policy revival or loans: Outlines possibilities like reinstating a lapsed policy or borrowing against it.
Claims Procedure: Step-by-step instructions for filing a claim, helping policyholders or beneficiaries navigate the process smoothly.
Policy Servicing: Information about customer support and how to get assistance regarding the policy.
Grievance Redressal: Details on how to file complaints, along with the contact details of the Insurance Ombudsman, ensuring policyholders know where to seek help in case of disputes.
Timelines for Settling Claims (Life Insurance)
As per IRDAI guidelines, insurers must settle claims within specific timelines to ensure efficiency and fairness:
Death claims (no investigation required): These should be settled within 15 days from the date the claim is initiated.
Death claims (investigation required): If the claim needs investigation, settlement must be completed within 45 days from the date of claim intimation.
Surrender or partial withdrawal requests: These should be processed within seven days of the claim initiation.
Maturity benefits, survival benefits, annuity payouts, and income benefits: These payments should be made on the due date, ensuring timely disbursement.
Penalties for Delayed Claims
If an insurer fails to settle the claim within the prescribed timelines, the claimant is entitled to receive interest at the bank rate plus 2% from the date the claim was received until the final payment. The insurer is required to pay this interest automatically, along with the claim amount, without the need for the policyholder to request it. This regulation ensures accountability and prompt claim settlement by insurers.
The Customer Information Sheet (CIS) is a required document for health insurance policyholders. It provides a clear and concise summary of the policy, ensuring that customers are fully informed about their health insurance coverage. The CIS must include the following essential details:
Key Information in a Health Insurance CIS
Type of Insurance: Specifies whether the policy is individual, family floater, critical illness, or any other type of health insurance.
Sum Insured: The maximum amount the insurer will pay for covered medical expenses during the policy term.
Coverage Provided: A detailed list of what medical treatments, hospitalisation expenses, and other healthcare services the policy covers.
Summary of Exclusions: Clearly outlines situations or medical conditions that the policy does not cover, such as pre-existing diseases within a waiting period, cosmetic surgeries, or experimental treatments.
Sub-Limits: Indicates any predefined limits on specific treatments or expenses (e.g., a limit on room rent or specific procedures), above which the insurer will not cover costs.
Deductibles: The specified amount that must be paid by the policyholder before the insurer starts covering the expenses. If the claim amount exceeds the deductible, this amount will be deducted from the total claim.
Co-Payment: The percentage of the claim amount that the policyholder is required to bear, while the rest is paid by the insurer.
Waiting Periods: The period during which certain treatments, diseases, or pre-existing conditions are not covered. For example, a waiting period for maternity benefits or coverage of pre-existing illnesses.
Important Policy Features:
Free Look Period: The time frame during which the policyholder can review and cancel the policy if they are not satisfied.
Policy Renewal: Information on when and how the policy can be renewed.
Migration: The option to switch to another plan or insurer, along with the conditions for doing so.
Portability: Guidelines on transferring the policy to another insurer without losing continuity benefits like the waiting period.
Moratorium Period: A period during which the insurer cannot contest claims, usually after a specific period of continuous coverage (e.g., after 8 years).
Claims Procedure: Step-by-step instructions on how to file a claim, including for both cashless and reimbursement claims.
Policy Servicing: Contact information for customer support, ensuring that policyholders can easily get assistance when needed.
Grievance Redressal Mechanism: Provides details on how to file complaints or raise concerns, including the contact information of the Insurance Ombudsman for the appropriate jurisdiction.
Health Insurance Claim Settlement Rules
The IRDAI has issued new guidelines to improve the cashless claim settlement process for health insurance. These rules ensure that claims are processed swiftly, especially in emergency situations, reducing the financial and emotional stress on policyholders.
Cashless Authorisation: Insurers must make a decision on cashless authorisation requests within one hour of receiving them from the hospital. This quick response ensures that policyholders can receive the required treatment without delay.
Final Authorisation for Discharge: Once the hospital submits a discharge request, the insurer must issue final authorisation for discharge within three hours. This prevents unnecessary delays in releasing patients after treatment.
No Delays in Discharge: According to IRDAI, under no circumstances should a policyholder be made to wait longer than three hours to be discharged. If there is a delay, the insurer will be responsible for covering any additional charges incurred by the hospital during the extended wait.
Claim Settlement in Case of Death: In the unfortunate event of a policyholder's death during treatment, the insurer is required to:
Immediately process the claim settlement request.
Ensure the prompt release of the deceased’s mortal remains from the hospital, without any delay.
These guidelines aim to streamline the claim process, providing policyholders with timely service and reducing complications during difficult situations.
Comments