Page 12 - Insurance Times July 2024

holders to cancel their policies without writing stage, ensuring a smoother insurer should refund proportion pre-
providing a reason as well as receive a claims process. mium for unexpired policy period, if the
refund for the remaining period. term of the policy is up to one year and
Stricter timelines for claim settlements IRDAI allows policyholders there is no claim made during the policy
have also been implemented. More- to cancel policies, get re- period, it said. The refund premium for
over, non-compliance with an the unexpired policy period should be
ombudsman's order can result in a fund made in respect of policy with the term
penalty of Rs 5,000 per day for the in- Giving more flexibility and freedom to more than one year and the risk cover-
surer. policyholders, the IRDAI has said retail age for such policy years has not com-
"According to IRDAI's guidelines, insur- policyholders can cancel an insurance menced, it said in a master circular.
ance companies are mandated to of- policy at any time during the term by
fer a 'base product' in every insurance informing the insurer and get the re- IRDAI asks insurance firms
category. This move aims to fund for the remaining policy period. to open more physical
standardise insurance options and ex- "In case the policyholder cancels the
pand customer selections through add- policy, he/ she is not required to give branches
ons over the base product." said reasons for cancellation. The insurer The Insurance Regulatory and Devel-
Rakesh Jain, CEO, Reliance General can cancel the policy only on the opment Authority of India (IRDAI) has
Insurance. grounds of established fraud, by giving asked insurers to open more bricks-
Under the new norms, insurers are minimum notice of 7 days to the retail and-mortar branches alongside step-
required to give customers the option policyholder," IRDAI said while an- ping up digital o erings.
to choose insurance policies for dura- nouncing a host of reforms in the sec- “Physical presence through brick-and-
tor. Every insurer should have a retail mortar offices leads a long way in gain-
tions less than 1 year, annually, or ex-
tending beyond 1 year. There is also an product which is identified and desig- ing customer confidence particularly in
nated as base product defining the
assurance that insurers would not re- remote locations of the country. Adop-
sort to underwriting at the time of a necessary minimum coverage in each tion of technology infrastructure to
claim. All necessary documents must be line of business, it said. reach out to customers enhances ease,
called for during the proposal under- If the customer cancels the policy, the a physical approach which can come in
handy to reach the last mile,” the regu-
lator said in a master circular on op-
Corporate governance for insurers: IRDAI lists new erations.

guidelines To instil confidence in customers
through visibility, the opening or clos-
IRDAI has directed insurance companies to take prior approval for the ap-
ing of business units must be done ju-
pointment of board chairperson.
diciously, safeguarding the interests of
The regulator said the present board chairperson can continue up to March policyholders, the regulator said.
31, 2026 or till they complete their current tenure. To promote checks and Places of business should be opened
balances, it is good practice for the chair of the board to be a non-execu- within a year from the date of ap-
tive board member and not serve as chair of any board committee, IRDAI
proval, after which it would lapse.
added.
To open a representative or liaison of-
In a master circular on corporate governance for insurers, issued on May fice outside India, the board of the in-
22. IRDAI said the board in consultation with the key management persons surer should approve all the related op-
need to ensure that the overall direction of the business of the insurance erational matters.
company, policies and strategies should shape the level of risk adoption, stan-
dards of business conduct and ethical behaviour of the insurer at the macro “The insurer should have appropriate
level. "While laying down the projections, the Board must address the ex- arrangements to ensure that the poli-
pectations of the shareholders and the policyholders," the guidelines said. cyholders’ liabilities that arise out of
foreign operations are adequately ring-
It said that the chief executive officer should be responsible for the conduct fenced in order to protect interests of
of the insurer's affairs in a manner which is not detrimental to the interests the policyholders residing in India,” it
of policyholders.
said.
12 July 2024 The Insurance Times