The Insurance Regulatory and Development Authority of India (IRDAI) has streamlined various rules concerning insurance policies.
As per these changes, policyholders can now cancel their insurance policies, subject to specific conditions.
Additionally, they will also be eligible to receive a refund for the remaining coverage period.
Furthermore, in line with IRDAI’s new regulations, general insurance companies are no longer permitted to deny claims due to missing documents.
Refund even on cancellation of policy
IRDA has issued a master circular outlining new rules for insurance policies. According to IRDA, policyholders are not required to provide a reason if they choose to cancel their policy.
In case of policy cancellation by the customer, the insurer must refund the proportionate premium for the remaining policy period, provided the policy duration is within one year and no claims have been made.
For policies exceeding one year, the premium should be refunded for the unexpired period.
The circular also states that insurers can only cancel policies in cases of proven fraud, with a minimum notice period of 7 days.
Claim will not be rejected due to lack of documents
As per IRDA’s circular, claims cannot be rejected solely due to missing documents.
The required documents must be requested during the proposal acceptance stage.
Customers are required to submit only the documents directly related to claim settlement.
These may include items like a driving license, permit, fitness certificate, FIR, untraced report, postmortem report etc.
Customers will be able to understand in easy language
IRDA’s circular requires that all customers receive a Customer Information Sheet (CIS).
This sheet simplifies policy details for customers, explaining basic features in easy-to-understand language.
This document includes details such as coverage scope, add-ons, insurance amount basis, special conditions and warranties, claim process, and other relevant information, all conveniently available in one place.
