The Insurance Regulatory and Development Authority of India (IRDAI) has released a master circular on the IRDAI (Insurance Products) Regulations 2024 for general insurance.
This circular, announced on June 11, 2024, supersedes all previous guidelines and circulars related to general insurance products and takes immediate effect.
Key Changes in IRDAI Guidelines
The new guidelines apply to all existing general insurance products and add-on covers, as well as the general insurance coverage sections within package products.
However, these guidelines do not apply to health insurance products included within a package product.
Flexibility in Policy Cancellation
One of the most significant changes introduced in the 2024 master circular is the increased flexibility for policyholders regarding policy cancellation. Here are the key points:
- Policyholder’s Right to Cancel: Policyholders can cancel their insurance policy at any time during its term by notifying the insurer. No reason for cancellation needs to be provided by the policyholder.
- Insurer’s Right to Cancel: Insurers can cancel a policy on grounds of established fraud, provided they give a minimum notice of 7 days to the policyholder.
- Statutory Insurance Protections: Insurers cannot cancel statutory Motor Third Party Liability insurance or any other compulsory insurance mandated by law, except in cases of double insurance or total loss.
- Refund Policies: For policies with a term of up to one year, insurers must refund a proportionate amount of the premium for the unexpired policy period, provided no claims have been made during the policy period.
Claims Documentation Requirements
The IRDAI circular also mandates that no claim shall be rejected due to a lack of documents. All necessary documents must be requested at the time of underwriting the proposal.
Only documents directly related to the claim settlement, such as the claim form, driving license, permit, fitness certificate, FIR, un-traced report, fire brigade report, post-mortem report, books of accounts, stock register, wage register, and repair bills (if cashless is not available), may be requested from the customer.
These new guidelines by IRDAI aim to enhance the flexibility and convenience for general insurance policyholders, ensuring better service and more straightforward processes for cancellations and claims.
