Page 41 - The Insurance Times August 2024

IRDAI Master Circular on Operations and

Allied Matters of Insurers

Introduction Prohibited Activities: Functions like investment,
fund management, AML compliance, and
The Master Circular on Operations and Allied Matters of
underwriting decisions cannot be outsourced.
Insurers, issued by the Insurance Regulatory and
Development Authority of India (IRDAI) on June 19, 2024, Reporting: Insurers must regularly report
aims to consolidate various guidelines for the effective and outsourcing activities.
compliant functioning of insurers. This document replaces
4. Grievance Redressal System
earlier guidelines and provides a comprehensive framework
for advertising, opening of business locations, outsourcing Board Approved Policy: Insurers must have a
activities, grievance redressal, usage of trade logos, group board-approved grievance redressal policy.
insurance policies, handling unclaimed amounts, and Technology-Based Solutions: Establish a
policyholder engagement. grievance portal/app for efficient grievance
handling.
Key Sections and Provisions Zero Grievances Goal: Aim to minimize grievances

1. Advertisement Compliance through consumer-friendly processes.
Advertisement Committee: Insurers must have an 5. Usage of Trade Logos
Advertisement Committee and compliance officer Written Agreement: Usage of trade logos of
to oversee advertisement content.
promoting partners must be backed by a written
Prohibited Advertisements: Ads should not agreement specifying terms and consideration.
compare rates, exaggerate benefits, or denigrate
competitors. Ads must disclose risk factors for 6. Group Insurance Policies
linked products and avoid portraying them as Underwriting Policy: Insurers must have a board-
investment options. approved group underwriting policy.
Ratings and Awards: Only ratings or awards from Premium and Benefits: Group master
independent sources can be mentioned. policyholders should not collect amounts higher
than the insurance premium from individual
2. Opening of Places of Business members.
Approval Process: Insurers must submit proposals 7. Unclaimed Amounts of Policyholders
in specified forms for opening new offices or Definition and Treatment: Includes any amount
relocating existing ones. Approvals are valid for one payable to consumers remaining unpaid beyond 12
year.
months. Unclaimed amounts older than 10 years
Foreign Branches: Insurers must follow detailed must be transferred to the Senior Citizens' Welfare
requirements for opening representative or branch Fund (SCWF).
offices outside India.
Disclosure Requirements: Insurers must maintain
searchable databases for unclaimed amounts and
3. Outsourcing of Activities update them regularly.
Principles: Due diligence, written contracts, and
risk management are mandatory.

38 August 2024 The Insurance Times