IRDAI sets 30-day free-look period for policies

Insurers are required to provide a tool on their websites for verifying authorised distribution channels.

The Insurance Regulatory and Development Authority of India (IRDAI) released a circular aimed at strengthening policyholder rights. 

The circular replaces 30 previous ones and consolidates policyholder entitlements into a single document. It emphasises faster and more efficient claims settlement, improving service standards within the insurance industry.

One of the key mandates is that insurers must provide a Customer Information Sheet (CIS) across all insurance segments, which will clearly detail policy features, benefits, and exclusions. Additionally, proposal forms and the CIS must be made available in regional languages upon request.

A 30-day free-look period is now mandatory for both life and health insurance policies, allowing policyholders ample time to review their policy terms. No premium or deposit is required at the proposal stage, except where risk cover starts immediately after payment. 

To ensure transparency, insurers are required to provide a tool on their websites for verifying authorised distribution channels. The assessment of suitability is also required for certain life insurance products, including savings-related and annuity products.

The circular also mandates the collection of nominee details, including bank account information, to streamline claim settlements in the event of the policyholder’s death. Insurers must integrate their systems with Digilocker to facilitate digital access to policy documents.

Furthermore, insurers are required to establish a Citizens' Charter that specifies service standards and must adhere to defined turnaround times for policy processing and claim settlements. Policyholders can also search for unclaimed amounts through the Bima Bharosa website or the concerned insurer’s platform.