[20th March 2024] In exercise of the
powers conferred by sub-section (2) of section 114A, section 14, sub section
(7) of section 38 ,sub section (3) of section 39, section 64VC, sub section (6)
of section 64VB of the Insurance Act, 1938 (4 of 1938) and section 14 and
section 26 of the Insurance Regulatory and Development Authority Act, 1999 (41
of 1999), the Authority, in consultation with the Insurance Advisory Committee,
hereby makes the following regulations, namely: (1)
These regulations may be
called the Insurance Regulatory and Development Authority of India (Protection
of Policyholders Interests, Operations and Allied Matters of Insurers)
Regulations, 2024. (2)
These regulations shall be
applicable to all insurers and distribution channels except for those engaged
exclusively in reinsurance business, unless otherwise specified. (3)
These regulations shall come
into force from the date of the publication in the Official Gazette or 1st
April, 2024, whichever is later. (4)
These regulations shall be
reviewed once in every 3 (three) years from the date of notification, unless a
review or repeal or amendment is warranted earlier (1)
To ensure fair treatment of
prospects at the stage of solicitation and sale of insurance policies. (2)
To ensure that interests of
policyholders are protected, and the conduct of the insurer and distribution
channel are not prejudicial to the interests of policyholders. (3)
To ensure that insurers and
distribution channel fulfil their obligations towards policyholders and have in
place standard procedures including best practices for sale and service of
policy holders. (4)
To ensure
policyholder-centric governance by insurers and distribution channels, with
emphasis on grievance redressal. (5)
To ensure that insurers
follow prudent practices on management of risks arising out of outsourcing with
a view to preventing negative systemic impact and to protect the interests of
the policyholders. To ensure sound and responsive management practices for
effective oversight and adequate due diligence with regard to outsourcing of
activities by insurers. (6)
To ensure that opening or
closing of places of business within or outside India by insurers is conducted
in a manner which is not prejudicial to the interests of policyholders. (1)
Part A covers provisions
relating to protection of interests of the policyholders; (2)
Part B covers provisions
relating to operations and allied matters of the insurers. PART
1 ROVISIONS RELATING TO PROTECTION OF INTERESTS OF POLICYHOLDERS The part A include
the following matters: Chapter 1 :
Activities prior to sale of insurance policies Chapter 2 : Proposal
for sale of insurance policies Chapter 3 : Sale and
Issuance of Insurance Policies Chapter 4 : Payment
and refund of Premium, Nomination and Assignment Chapter 5 : Servicing
of Policyholders Chapter 6 :
Settlement of Claims Chapter 7 : Grievance
Redressal In these regulations,
unless the context otherwise requires: (1)
"Act" means the
Insurance Act, 1938 (4 of 1938). (2)
"Authority" means
the Insurance Regulatory and Development Authority of India established under
the provisions of section 3 of the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999). (3)
"Bank Rate" means
Bank rate fixed by the Reserve Bank of India (RBI) which is prevalent as on 1st
day of the financial year in which the claim has fallen due. (4)
"Competent
Authority" means (i)
Chairperson, or (ii)
such whole-time member or
such committee of the whole-time members or such officer(s) of the Authority,
as may be determined by the Chairperson. (5)
"Complaint" or
"Grievance" means written expression (includes communication in the
form of electronic mail or voice based electronic scripts) of dissatisfaction
by a complainant with respect to solicitation or sale or purchase of an
insurance policy or related services by insurer and /or by distribution
channel. Explanation: An
inquiry or service request would not fall within the definition of the
"complaint" or "grievance". (6)
"Complainant"
means a policyholder or prospect or nominee or assignee or any beneficiary of
an insurance policy who has filed a complaint or grievance against an insurer
and /or distribution channel. (7)
"Cover" means an
insurance contract whether in the form of a policy document or a cover note or
a Certificate of Insurance or any other form as may be specified to evidence
the existence of an insurance contract. (8)
"Distribution
Channels" include insurance agents, intermediaries or insurance
intermediaries, and any persons or entities authorised by the Authority to
involve in sale and service of insurance policies. (9)
"Mis-selling"
includes sale or solicitation of policies by the insurer or through distribution
channels, directly or indirectly by (a)
exercising undue influence,
use of dominant position or otherwise, or (b)
making a false or misleading
statement or misrepresenting the facts or benefits, or (c)
concealing or omitting
facts, features, benefits, exclusions with respect to products, or (d)
not taking reasonable care
to ensure suitability of the policy to the prospects/policyholders. (10)
"Proposal form"
means a form to be filled in by the prospect in physical or electronic form,
for furnishing the information including material information, if any, as
required by the insurer in respect of a risk, in order to enable the insurer to
take informed decision in the context of underwriting the risk, and in the
event of acceptance of the risk, to determine the rates, advantages, terms and
conditions of the cover to be granted. Explanation: (i)
"Material Information" for the purpose of these regulations shall
mean all important, essential and relevant information and documents explicitly
sought by insurer in the proposal form. (ii) The requirements
of "disclosure of material information" regarding a proposal or
policy, apply both to the insurer and the prospect, under these regulations. (11)
"Prospect" means
any person who is a potential customer and likely to enter into an insurance
contract either directly with the insurer or through the distribution channel
involved. (12)
"Prospectus" means
a document either in physical or electronic format issued by the insurer to
sell or promote the insurance product. Explanation: Insurance
product referred herein shall also include the riders or add-on(s), if any.
Where a rider or add-on is tied to a base policy, all the terms and conditions
of the rider or add-on shall be mentioned in the prospectus. Where a standalone
rider or add-on is offered to a base product, a reference to the rider or
add-on shall be made in the prospectus of the base policy indicating the nature
of benefits flowing thereupon. (13)
"Solicitation"
means the act of approaching a prospect or a policyholder by an insurer or by a
distribution channel with a view to persuading the prospect or a policyholder
to purchase or to renew an insurance policy. (14)
"Unfair trade
practice" shall have the meaning ascribed to such term in the Consumer
Protection Act, 2019, as amended from time to time. (15)
All words and expressions
used and not defined in these regulations, but defined in the Act, or the
Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) or the
Insurance Rules, 1939 or any other regulations issued by the Authority shall
have the meanings respectively assigned to them in those Acts or Rules or
Regulations. CHAPTER
1 ACTIVITIES PRIOR TO SALE OF INSURANCE POLICIES Every insurer shall
ensure that: (a)
the prospects or the
policyholders has equitable and inclusive access to insurance products and
services either directly or through the distribution channel. (b)
the solicitation process is
transparent and has built-in practices to enable fair and equitable treatment
of the prospect or the policyholder at all points of time and provide all
necessary information about the products to enable them to take informed
decision about purchasing insurance policies. (1)
Every insurer shall have in
place a Board approved policy for protection of (2)
Every insurer shall ensure: (i)
that appropriate framework
is put in place to ensure that the features, benefits along with terms and
conditions of the products being sold are represented correctly and fully and
that the products are not mis-stated or misrepresented to prospects or
policyholders. (ii)
inclusivity and
accessibility of insurance cover to persons with disabilities. (iii)
adoption of suitable service
and process efficiencies including implementing technology solutions for grievance
redressal. (iv)
that measures are taken to
prevent mis-selling and unfair business practices, by building suitable conduct
measures including appropriate grievance redressal framework. (v)
setting up reasonable
turnaround times for various activities and services to provide timely
completion and resolution; and to publish the same on the website prominently. (vi)
establishing a mechanism to
create Insurance Awareness on an ongoing basis so as to educate prospects and
policyholders about insurance products, benefits and their rights and
responsibilities. (vii)
establishing systems and
processes for expeditious settlement of claims. (1)
Every insurer shall ensure
that the products that are being offered for sale and those that are withdrawn
are published prominently on its website along with the benefits, features,
applicable terms and conditions, premium, prospectus, its Unique Identification
Number, benefit illustration, as applicable, and shall update regularly. (2)
Every distribution channel
shall provide a link prominently on its website, if maintained, to directly
access the insurers website wherein products on offer are displayed with
respect to insurers. (a)
Every insurer shall ensure
that the information given to the prospect or the policyholder about the
product offerings shall reflect true and correct picture about the features,
benefits, exclusions, risks, options, exit options including grievance
redressal in clear and simple terms. (b)
Every insurer shall develop
and maintain a prospectus for every retail insurance product including riders
or add-ons thereto and make available such prospectus on their website. (c)
The Competent Authority
shall specify minimum information to be incorporated in the prospectus. (d)
Insurers shall be
responsible for the contents of the prospectus and shall ensure that (a)
no sale of insurance product
is made without prospectus, explaining all the benefits, features, terms and
conditions of the product and providing benefit illustration to the prospect,
wherever applicable. Explanation: Except
for those life insurance products where all the benefits are assured in
absolute amounts at the outset of the contract, all other life insurance
products shall provide the prospective policyholder a customized benefit
illustration at the point of sale, illustrating the guaranteed and
non-guaranteed benefits at gross investment returns, as may be specified. (b)
the prospectus enables the
prospects or the policyholders to make informed decisions. The benefits and
features of the product considering the nuances of the products are explained
in clear and concise terms including giving illustration. (c)
there is no misleading or
false information. (d)
details of the grievance redressal
processes are clearly provided; and (e)
insurer or distribution
channel provide all necessary information including any material information in
respect of the proposed CHAPTER
2 PROPOSAL FOR SALE OF INSURANCE POLICIES (1)
Unless otherwise exempted by
the Competent Authority, a proposal for grant of insurance cover, for any class
of insurance business, must be evidenced by a proposal form in physical or
electronic form. (2)
The matters related to
proposal form and the sale of insurance policies shall be in a manner as
specified by the Competent Authority. CHAPTER
3 SALE AND ISSUANCE OF INSURANCE POLICIES Every insurer shall ensure
that: (a)
the policy terms and
conditions are written in simple and clear terms to understand, avoid jargon
and avoid coercive, unfair and one-sided clauses. (b)
the insurance policies
issued to the policyholders contain such minimum details as may be specified. Every insurer shall
mandatorily provide the customer information sheet along with the policy
document in the manner as may be specified. (a)
Every insurer shall have in
place a Board approved policy for insurance policies issued in electronic form
and shall inter-alia include the following: (1)
Measures to safeguard the
privacy of the data and information, (2)
Adequacy of systems to
prevent manipulation of records and transactions, (3)
Broad framework on security
of data, (4)
IT related processes, (5)
Data and record
reconciliation amongst multiple systems, if applicable, and (6)
Putting in place continuous
review and upgradation of the cyber security safeguards. (b)
Irrespective of whether the
proposal is received in electronic form or otherwise, every insurer shall issue
insurance policies only in the electronic form. Provided that the
Authority, on being satisfied that it is in the interest of policyholders and
for orderly growth of insurance industry, allow such exemptions to this
requirement. Provided further that
the insurer shall mandatorily seek the choice of the prospect in the proposal
form for availing physical policy document. (c)
Notwithstanding sub-regulation
(2) above, all policies issued in electronic form by the insurer directly to
the policyholder shall also be issued in physical form, if requested by the
policyholder. (1)
No group shall be formed for
the sole purpose of availing insurance and every insurer and the distribution
channel shall ensure that the group considered for availing insurance shall be
in existence before issuance of the insurance policy. (2)
Every insurer shall ensure
that: (i)
groups, where a person is
negotiating "group" rates and then finding members to enrol in to the
group for insurance, are not to be considered as a legitimate group for the
purpose of availing group insurance. (ii)
in case of an
employer-employee group, where an employer arranges a group insurance policy
for its employees, the employer shall be treated as the master policyholder
with the employees being treated as the beneficiaries. In such cases, the
employer shall issue confirmation of insurance cover to individual employees with
clear reference to the group insurance policy. (iii)
In case of a
non-employer-employee group purchasing a group policy: (a)
the administrator will be
treated as master policyholder and shall have authority from the members to
arrange insurance on their behalf. (b)
the individual group member
would be treated as the insured beneficiary and the master policyholder will
only be the holder of the policy. (c)
it shall be the duty of the
insurer to issue certificate of insurance to all the members of the group. Such
certificate shall contain information on the schedule of benefits, the premium
charged and important terms and conditions of the insurance contract in the
manner as may be specified. (1)
Subject to ensuring compliance
as per extant law on data protection, insurers and distribution channels shall
ensure that the information and documents collected during the solicitation or
subsequently during all times are maintained with utmost confidentiality,
privacy and protected manner. (2)
Subject to sub-regulation
(1), information collected from the proposal form during the course of
solicitation of an insurance policy or issuance of an insurance policy shall
not be parted or shared with any third party without the explicit consent of
the policyholder, except (a)
with the statutory
authorities in accordance with the existing statutory laws; or (b)
for the purpose of
underwriting the policy or settling a claim under the policy; or (c)
with any other institution
as authorised by the Authority. (3)
No insurer shall insert any
clause or condition in the proposal form which, by default, allows the insurer
to part or share policyholders information to any third party. CHAPTER
4 PAYMENT AND REFUND OF PREMIUM, NOMINATION AND ASSIGNMENT Subject to ensuring
compliance with the provisions and norms notified under Prevention of Money
Laundering Act, 2002, insurers shall allow for the following manner of payment
of premium: (1)
As prescribed in the
Insurance Rules, 1939; (2)
Recognized by the Reserve
Bank of India as a valid mode of payment; and (3)
Any other manner of payment
as may be specified. (1)
In the event of any refund
of premium becomes due on account of policy cancellation or alteration of any
terms and conditions of the contract of insurance or otherwise, such refund
shall be made only to the bank account of the policyholder or the proposer or
nominee(s), as the case may be, through electronic transfer. (2)
In order to enable electronic
transfer of refund and for payment of claims, the insurer shall mandatorily
collect the details of bank account of the policyholder or the proposer at the
proposal stage. (1)
Provisions applicable to
Life insurers (i)
No proposal shall be
accepted unless nomination is obtained as per section 39 of the Act. (ii)
Insurers shall provide a
facility for changing the nominee(s). (iii)
The fee for registering
cancellation or change of nomination(s) shall not exceed Rs. 100/- (Rs. One
Hundred only) on each occasion. (2)
Provisions applicable to
General and Health insurers With respect to all individual and group policies,
as applicable, the insurer shall obtain nomination at the time of issuance of
new policies and at the time of renewal for existing policies. (3)
Provisions applicable for
all insurers (i)
No fee shall be collected
for registering a nomination at the time of effecting a policy of insurance. (ii)
The nomination effected by a
policyholder at the inception of the policy through the proposal form and
recorded by the insurer in the schedule of a policy document or through an
endorsement issued accepting change in nomination shall be considered as a
valid acknowledgement by the insurer. (1)
The fee for granting a
written acknowledgement of the receipt of notice of assignment or transfer
assignment shall not exceed Rs. 100/- (Rs. One Hundred only). (2)
No other fee shall be
collected for rendering any other services in relation to the assignment or
transfer of insurance policy carried out in accordance with Section 38 of the
Act. CHAPTER
5 SERVICING OF POLICYHOLDERS (1)
Every policyholder of life
and new individual health insurance policies, except for those policies with
tenure of less than a year, shall be provided a free look period of 30 days
beginning from the date of receipt of policy document, whether received
electronically or otherwise, to review the terms and conditions of such policy. (2)
The insurer shall inform
clearly and explicitly to the policyholder about the availability of the free
look period. (3)
In the event a policyholder
disagrees to any of the policy terms or conditions, or otherwise and has not
made any claim, he shall have the option to return the policy to the insurer
for cancellation, stating the reasons for the same. (4)
Irrespective of the reasons
mentioned, the policyholder shall be entitled to a refund of the premium paid
subject only to a deduction of a proportionate risk premium for the period of
cover and the expenses, if any, incurred by the insurer on medical examination
of the proposer and stamp duty charges. (5)
In respect of a linked
insurance product, in addition to the deductions under sub-regulation (4)
above, the insurer shall also be obligated to repurchase the units at the Net
Asset Value (NAV) of the units on the date of cancellation. (6)
A request received by
insurer for cancellation of the policy during free look period shall be
processed and premium shall be refunded within 7 days of receipt of such
request, as stated at sub regulations (4) and (5) above. (1)
Every insurer shall ensure
that the prospect or the policyholders are provided with necessary information
about various services and shall widely disseminate information about all the
services that may be availed, along with the procedure for availing such
services including the turnaround times. (2)
The insurer shall deliver
the services requested for within a reasonable time not exceeding the specified
turnaround time, with speed and efficiency and establish a mechanism to obtain
feedback for continuous improvements. (3)
Every insurer and
distribution channel involved in servicing of the policyholders shall ensure
that all the dealings with policyholders are conducted in a manner such that it
achieves the following outcomes: (i)
Policyholders are (a)
treated with fairness and
impartiality; (b)
provided with clear and
prompt information in relation to their policies at all times; (c)
not faced with unreasonable
pressure or advice to change products or switch providers; and (d)
not barred from submitting
claims or making complaints. (ii)
Post-sale servicing of
policyholders to be complemented with technological solutions to provide prompt
and efficient services. (iii)
Policyholders reasonable
expectations are met on servicing standards. (4)
Every insurer and
distribution channel involved shall be responsible to achieve the outcomes
specified in sub regulation (3) above. (5)
Distribution channel shall
ensure that all policyholders are serviced in accordance with code of conduct
as may be specified. (6)
No additional fee shall be
charged by the insurer or distribution channel or group master policyholder for
servicing of policyholders in relation to an insurance policy, except for such
services as may be specified. (7)
Every insurer and
distribution channel shall comply with the guidelines issued by the Competent
Authority on Mis-selling, Unfair trade practice, fair treatment, compliance and
over sight, mitigation of conflicts of interests, guidance to prospect on
product suitability and suitability assessment and Unclaimed amount. CHAPTER
6 SETTLEMENT OF CLAIMS (1)
Every insurer shall ensure
that: (a)
necessary specific
documentation required to support the claim are listed in the policy document
along with the procedures to be followed for settlement of claims, in addition
to placing the information prominently on their website. (b)
claims registered are
settled in a timely manner not exceeding the turnaround times for settlement of
claims as per their Board approved policy and in the manner as may be
specified. (2)
All distribution channels
shall comply with the specified code of conduct with respect to services
related to settlement of claims. With regard to the
claims, every insurer or the distribution channel, as applicable, shall inter
alia ensure the following: (1)
Provide necessary support
and guidance for registering claim; (2)
Provide fair treatment at
all times in processing the claim; (3)
Provide information at
various stages of claim settlement; (4)
Call for all necessary
documents as specified in the policy document at one go and avoid calling such
documents/information in a piece meal manner; (5)
Settle the claims with speed
and efficiency within a reasonable time. (1)
for participating policies,
at least once in a year, the bonus accrued to their policies during the
financial year and total bonuses accrued till the end of financial year. (2)
for linked policies, all the
charges levied, value of the linked policy at the beginning and at the end of
the financial year. CHAPTER
7 GRIEVANCE REDRESSAL (1)
Every insurer shall have a
system, including IT systems, and a procedure for receiving, registering and
disposing of grievances in each of its offices. Every insurer shall publicize
its grievance redressal procedure and ensure that it is specifically made
available on its website. (2)
Every insurer and where
relevant, the distribution channel, shall have in place robust procedures and
effective mechanism to resolve grievances of policyholders and/ or claimants
efficiently, effectively and in a timely manner. (3)
No insurer or distribution
channel shall prohibit, bar or discourage any policyholder or claimant from
lodging any grievance to the Authority. (4)
The Grievance Redressal
Procedure as may be specified shall be followed by all insurers and
distribution channels. (5)
Insurers shall widely
publish the availability of option to the complainant for taking up grievance
with Insurance Ombudsman, in case the grievance is not resolved to the
satisfaction of the complainant. PART
2 OPERATIONS AND ALLIED MATTERS OF THE INSURERS In these regulations,
unless the context otherwise requires: (1)
"Act" means the
Insurance Act, 1938 (4 of 1938). (2)
"Advertisement"
means a communication, issued through any mode or medium, addressed to the
public or section of it, the purpose of which is to influence the opinion or
behaviour of prospects for facilitating solicitation or sale of insurance
products and includes insurance advertisements and institutional
advertisements. (3)
"Authority" means
the Insurance Regulatory and Development Authority of India established under
the provisions of section 3 of the Insurance Regulatory and Development
Authority Act, 1999 (41 of 1999). (4)
"Competent
Authority" means (i)
Chairperson or (ii)
such whole-time member or
such committee of the whole-time members or such officer(s) of the Authority,
as may be determined by the Chairperson. (5)
"e-Insurance
Account" or "eIA" means an electronic insurance account for
maintaining insurance policies issued in electronic form. (6)
"e-proposal" or
"electronic proposal" means a proposal form for an insurance policy
filed in electronic form and the free consent of the prospect obtained in
accordance with the guidelines issued from time to time. (7)
"e-insurance
policy" or "electronic insurance policy" shall mean a digitally
signed policy document evidencing the insurance contract issued to the
policyholder by an insurer in an electronic form. (8)
"e-signature or electronic
signature" shall have the same meaning as specified in the Information
Technology Act, 2000 as amended from time to time. (9)
"Foreign Branch
Office" shall mean a branch office of the insurer set up outside India
which includes (a) any establishment described as a branch by the insurer; and
(b) any establishment carrying on either the same or substantially the same
activity as that carried on by the Head Office of the insurer. (10)
"Insurance
advertisement" means and includes any communication issued by insurers,
insurance intermediaries, through any mode, related to an insurance product and
intended to result in the eventual sale or solicitation of an insurance product
from the members of the public, or which urges a prospect or a policyholder to
purchase, a policy of insurance. (11)
"Institutional
advertisement" means an advertisement which is not intended to solicit the
purchase of insurance policies, but only promotes the brand image of the
insurers and/or its intermediaries or insurance intermediaries. (12)
"Material
Outsourcing" means outsourcing of such activities which are assessed by
the insurers as "material", based on the factors as may be specified
by the Competent Authority. (13)
"Misleading
Advertisement" shall have the meaning ascribed to such term in the
Consumer Protection Act, 2019, as amended from time to time. (14)
"Outsourcing" is
defined as the use of third party services by the insurer to perform activities
that would normally be undertaken by the insurer, either now or in future, but
does not include services which are generally not expected to be carried out
internally by the insurers such as Legal services, Banking Services, Courier
Services, Medical examination, Forensic analysis. (15)
"Outsourcing Service
Provider" means third party service provider who carries out the
activities outsourced, for insurers. (16)
"Outsourcing
Agreement" means a written agreement entered into between the insurer and
outsourcing service provider outlining the terms and conditions for services
which may be rendered by the Outsourcing service provider. (17)
"Outsourcing
Committee" shall be a Board constituted committee within the insurer with
functions as per these regulations. (18)
"Place of
Business" means, a regional office, a zonal office, a divisional office,
branch office or any subordinate office or any other office by whatever name
called set up within India or a representative or a liaison office of Indian
insurer or a Foreign Branch Office set up outside India by the insurers
registered in India. (19)
"Representative or a
Liaison Office" means an office outside India of an insurer, to act as a
channel of communication with the principal place of business or Head Office or
by whatever name called, and also to interact with different entities, but
which does not undertake any commercial or trading or solicitation or
industrial activity, directly or indirectly, and also maintains itself out of
the remittances received from the parent organization through normal banking
channels. (20)
"Trade Logo" for
the purpose of these regulations is a name or a mark, such as symbol or
monogram or logo which uses the name of an insurer as an acronym for the
purpose of promoting, canvassing and publicizing the insurer or the products
and services offered. (21)
All words and expressions
used and not defined in these regulations, but defined in the Act, or the
Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) or the
Insurance Rules, 1939 or any other Rules or Regulations made thereunder shall
have the meanings respectively assigned to them in those Acts or Rules or
Regulations. CHAPTER
1 ADVERTISEMENT (1)
The information being
advertised shall be fair and true and shall reflect potential risks within the
products offered and shall not mislead or misrepresent the facts or features. (2)
Every insurer, while
publishing advertisements, shall necessarily include its registered name along
with its trade name or monogram or logo visible prominently. (3)
Every distribution channel
shall publish advertisements only as soliciting insurance products offered by
insurers and not give any impression in the advertisement, as if the products
are offered by it directly. (4)
No insurer or distribution
channel shall publish or cause to publish any misleading advertisement. No
advertisement shall make any claim or display such information which: (a)
affects the ability of a
prospect to identify and discern the benefits of insurance products; (b)
disguises or obscures terms
and conditions of insurance product; (c)
makes claims beyond the
ability of the policy to deliver beyond the reasonable expectation of
performance; (d)
uses words or phrases such
that it hides or underplays the risks inherent in the policy from the prospect; (e)
omits to disclose or
discloses insufficiently the important exclusions, limitations and conditions
of the policy; (f)
contains illegible text
(including on account of font size) forming part of the advertisement,
including a reference to conditions where applicable; (g)
contains false or fabricated
facts, figures and features. (5)
All insurers and
distribution channels shall ensure that mandatory disclosures as specified by
these regulations and applicable circulars are clear, conspicuous and legible. (6)
All insurers and
distribution channels shall ensure that static or interactive content posted by
them on their social media platform or page complies with the provisions of
these regulations and the circulars issued in this regard. (7)
All insurers shall ensure
that advertisement activities that are conducted through their distribution
channels are subject to adequate controls and oversight such that all such
advertisements that pertain to the insurer or its products or performance are
not unfair, deceptive or misleading. (8)
Every insurer and
distribution channel shall ensure that they do not engage in any unfair trade
practices. Every advertisement
must be approved by the insurer in writing prior to its issue if the
advertisement is issued by (a)
A distribution channel
representing the insurer; or (b)
An insurance intermediary
representing the customer if it relates to any insurance product. Every insurer and
distribution channel shall ensure that it establishes such internal controls,
compliances and such other measures as may be specified. CHAPTER
2 PLACES OF BUSINESS OF INSURERS (1)
All the insurers shall have
in place the Board approved plan on "Places of Business" and to be
reviewed on periodic basis. (2)
The plan on places of
business, for the next five years, shall contain the following: (a)
the total number of new
places of business proposed to be opened within India in the Metro, Urban,
Semi-Urban and Rural centres. (b)
the locations of places of
business proposed to be opened within India. (c)
the proposed capital and
operational expenditure expected to be incurred initially and subsequently at
regular intervals in opening and running each of the places of business. (d)
the staff requirement for
each of the places of business and its associated costs. (e)
the premium revenue expected
to be generated from each of the proposed places of business. Every insurer shall
have in place Board approved Annual Business Plan at the beginning of the
financial year. Except otherwise
specifically prohibited by the Authority, insurers that fulfil the following
conditions are permitted to open places of business within India and inform the
Authority in a manner as specified: (A)
- For insurers who have
completed five (5) years of operations: (1)
Minimum control level of
solvency in the preceding three financial years. (2)
Expenses of Management are
within the limits specified under the Regulations on Expenses of Management in
the preceding Financial Year. (B)
For insurers who have not
completed five (5) years of operations (1)
Minimum control level of
solvency to be maintained. (2)
As proposed in the business
plan submitted in IRDAI/R1 and IRDAI/R2 applications and/or has received
forbearance under the Expenses of Management Regulations within the first five
years of commencement of its operations. If the insurer is not
compliant with the conditions stipulated at regulation 32, such insurer shall
open places of business only after obtaining approval of the Competent
Authority in accordance with these Regulations. Proposals for opening
places of business shall be submitted in such form and in such manner as may be
specified. (1)
New places of business
proposed under regulation 33 and approved by the Competent Authority shall be
opened within a period of one year from the date of approval. (2)
After the expiry of the time
limit, the approval of the Competent Authority stands lapsed. (1)
Closure or relocation of the
places of business within India by the insurers shall be after due
consideration of all the factors, including the possible inconvenience to its
policyholders. (a)
Closure of any place of
business or relocation of any place of business, shall be approved in advance
by the Board appointed Policyholder Protection, Grievance Redressal and Claims
Monitoring Committee. (b)
Relocation or change of any
place of business, otherwise than within the same city, town or village shall
be subject to the prior approval of the Competent Authority. Every insurer
shall submit the proposal of such relocation or change to the Competent Authoritys
consideration in the form as may be specified. (c)
Minimum of two months
advance notice shall be given to the policyholders serviced, on all the
proposed relocations or the closures, whether within the same city, town or
village or otherwise, along with the information on alternate arrangements made
to service the existing policyholders. (2)
The conditions on closure of
places of business and relocation of places of business are also applicable to
the places of business opened by the insurers in accordance to regulation 32 or
33, as the case may be. (1)
An insurer registered with
the Authority may open a Foreign Branch Office or a Representative or a Liaison
Office outside India subject to prior approval granted by the Competent
Authority. The cost of opening and maintaining the Representative or a Liaison
Office outside India shall be met out of insurers shareholders funds beyond
solvency margin. (2)
Opening of a Representative
or a Liaison Office or a Foreign Branch Office by an insurer shall be subject
to obtaining approval or a clearance from the regulator of the host country, as
applicable. (3)
Norms for Opening a Liaison
Office or a Representative Office. - Insurers desirous of opening a
representative or a liaison office outside India shall apply to the Authority
in specified Form if they are compliant with: (a)
control level of solvency in
the preceding Financial Year; (b)
Having a satisfactory track
record on market conduct, regulatory compliances, redress of complaints, etc. Provided that Liaison
Office or Representative Office shall be engaged only in such activities as
specified. At the close of the
financial year, insurers, as a part of its annual report, shall furnish such
details of representative or liaison office outside India or Foreign branches,
as may be specified. (a)
The insurer desiring to open
a foreign branch office shall make an application in the form and manner as may
be specified. (b)
The insurer shall seek
approval of the Competent Authority to open a Foreign Branch Office or an
office at the International Financial Service Centre. The insurers seeking
to set-up foreign branch office or office at IFSC shall comply with the
following norms: (1)
have been in operations at
least for three (3) years. The number of years of operations shall be reckoned
from the date of issuance of R3. (2)
have been compliant with
control level of Solvency, have Profits after Tax, track record, no adverse
report or any other requirements as may be specified. (3)
Where the insurer is closely
held, the Board Resolution in support of the commitment to support the
operations of the foreign branch office shall be furnished. Where the insurer
is widely held, a resolution of the shareholders to support the operations of
the foreign branch office shall be furnished. The approval to open
a foreign branch office of the insurers shall be subject to the following terms
and conditions: (1)
Initial and further augmentation
of capital and liabilities of the Foreign Branch Office shall be met out of the
Insurers Shareholders funds beyond solvency margin requirements. (2)
Compliance with Foreign
Exchange Management Act, 1999 and any other law in force governing the operations
of such offices outside India. (3)
Compliance with host
countrys solvency requirements. (4)
The Insurer shall file a
copy of the license or the certificate of registration upon receipt of the same
from the host country. (5)
The Insurer shall
immediately report to the Authority any regulatory or supervisory action taken
by the host country regulator with full details along with the penalties
imposed and other administrative actions, if any, and the remedial steps taken
thereafter. (6)
The Competent Authority may
impose any other terms and conditions while granting the approval for opening
the foreign branch office. The insurer shall
immediately inform the Authority any adverse findings on the foreign branch
office operations by the host country regulator. The insurer shall
have in place appropriate arrangements to ensure that the policyholders
liabilities that arise out of: (1)
foreign operations are
adequately ring-fenced in order to protect the Indian policyholder. (2)
Wherever the Insurers
foreign branch office operations have resulted into a loss or are likely to
result into a loss, then additional capital requirements for meeting such loss
or for meeting the capital or other regulatory requirements shall be
contributed out of the Shareholders funds of the insurer beyond solvency
margin, and no contributions from the policyholders funds shall be utilized to
meet the capital requirement of the foreign branch office. (1)
The Competent Authority
reserves the right to call, inspect or investigate any document, record or
communication pertaining to the foreign branch office set up by the insurer.
The insurer shall furnish such requirements within the timelines specified
therein. (2)
Notwithstanding the above,
where the Competent Authority is of the opinion that the operations of a
foreign branch office are not in the interests of the insurer or the
policyholders in India, the Authority reserves the right to direct the insurer
to close the said foreign operations or to completely divest its stake in the
said foreign branch office after giving an adequate opportunity of being heard
to the insurer. All insurers shall
comply with the directions as may be specified while opening, closing or
relocating the places of business. CHAPTER
3 OUTSOURCING OF ACTIVITIES BY INSURERS (1)
The Regulations contained in
this schedule are applicable to all insurers registered with the Authority
excluding those engaged in reinsurance business. (2)
These regulations are
applicable to outsourcing arrangements entered into by an insurer with an
outsourcing service provider located in India or outside India as allowed by
the Competent Authority. (1)
Every insurer shall be
prohibited from Outsourcing such business activities as may be specified by the
Competent Authority from time to time. (2)
These regulations shall not
be construed to be authorizing any activity which otherwise is prohibited by
any law or regulation or guidelines of the Authority for the time being in
force. The Board of the
Insurer shall be responsible for the following functions under these
regulations: (1)
The Board of Directors shall
evaluate the need for outsourcing and shall approve and put in place an
Outsourcing Policy. The Board of Directors, may delegate, the mandate of
approving the outsourcing policy, to the Outsourcing Committee. The Board
approved outsourcing policy shall cover the following:
(i)
Framework for assessment of
risks involved in outsourcing including the confidentiality of data, quality of
services rendered under outsourcing contracts;
(ii)
Parameters for determining
the cost-benefit analysis for each outsourced activity;
(iii)
Guiding principles for
evaluation of the outsourced service provider including its ability and
capability to provide the required services;
(iv)
Norms for implementation and
review of the outsourcing policy, determining the managements responsibility
for approving, determining the consideration amount involved and monitoring the
outsourcing arrangements, and delegation of authority within the insurers
hierarchy;
(v)
The degree of due diligence
required for other than-material outsourcing activities. (2)
Annual review of the summary
of the outsourced activities of the insurer and approval of changes to the
policy on the basis of the reviewed report. (3)
Review of exceptions, if
any, arising out of the annual review of outsourcing contracts by the
Outsourcing Committee. (4)
Ensuring that the pricing
for outsourcing arrangements with related parties or group entities are
consistent with arms length principles and as per the Board approved policy in
this regard. (5)
There shall be no Conflict
of interest with related parties of insurers and distributional channels. (1)
Composition: The Board of
Directors of the insurer shall constitute an Outsourcing Committee comprising
of key management persons of the insurer, and shall at the minimum, include the
Chief Risk Officer, Chief Financial Officer and Chief of Operations. (2)
The Board constituted
Outsourcing Committee shall be responsible for implementation of the Board
approved policies and shall inter-alia be responsible for: (i)
Effective implementation of
the policy on outsourcing. (ii)
Evaluation of insurers need
to perform the activities proposed for outsourcing and key risk associated with
outsourcing contracts. (iii)
Scope of services of the
outsourcing service provider. (iv)
Evaluation of the cost and
benefits of outsourcing activities. (v)
Ensuring that the approval
to the outsourcing arrangements entered into / proposed to be entered into by the
insurer is as per the Outsourcing Policy approved by the Board of Directors. (vi)
Annual Review of performance
of each of the outsourcing service providers. (vii)
Ensuring compliance with the
Outsourcing Policy and applicable laws, regulations. (viii)
Annual review of Outsourcing
Policy. (ix)
Identifying risks associated
with activities proposed to be outsourced. (x)
Communicating information
pertaining to risks associated with material activities to the Risk Management
Committee of the Board in a timely manner, and (xi)
Ensuring that outsourcing
activities in any way, do not prejudice the interests of policyholders. An outsourcing
arrangement shall, inter alia, be considered material if the estimated annual expenditure
under an outsourcing contract is likely to exceed 5 % of the total expenditure
incurred during preceding financial year on all outsourcing activities. All
insurers shall evaluate the outsourcing arrangements based on the detailed
parameters for materiality assessment as may be specified. All outsourcing
arrangements assessed as material shall be subject to evaluation of the risks.
The Competent Authority shall specify: (1)
the risks which, at minimum,
shall be evaluated by the insurer; (2)
due diligence criteria and
documentation to be maintained for due diligence process carried out. (1)
The insurer shall satisfy
itself that the outsourcing service providers security policies, procedures and
controls will enable the insurer to protect confidentiality and security of
policyholders information even after the contract terminates. (2)
The insurer shall ensure
that the data or information parted to any outsourcing service provider under
the outsourcing contracts remains confidential at all times. (3)
An insurer shall take into
account any legal or contractual obligations on the part of the outsourcing
service provider to disclose the outsourcing arrangement and circumstances
under which insurers customer data may be disclosed. In the event of
termination of the outsourcing agreement, the insurer should ensure that the
customer data is surrendered by the service provider to insurer and ensure
there is no further use or misuse of customer data by the service provider. (4)
Outsourcing service
providers shall handle data shared by insurers in such manner as may be
specified. All insurers shall
establish systems and effective internal controls in relation to outsourcing as
may be specified by the Authority, considering the interests of the insurer,
policyholders and the insurance industry. (1)
Insurers shall, in all
cases, obtain an undertaking from their outsourcing service providers or
include a provision within the outsourcing agreement, giving authorized
representatives of the Authority the right to: - (a)
examine the books, records,
information, systems and the internal control environment in the outsourcing
service provider (or sub-contractor as applicable), to the extent that they
relate to the service being performed for the insurer, and (b)
access any internal audit
reports or external audit findings of the outsourcing service provider that
concern the service being performed for the insurer. (2)
In cases where insurer
outsources to the service providers outside India, if permitted by the
Competent Authority, the insurers shall ensure that the terms of the agreement
are in compliance with respective host country regulations governing the
outsourcing service provider and laws of the country concerned and such laws
and regulations do not impede the regulatory access and oversight by the
Authority. All original policyholder records continue to be maintained in
India. (1)
Insurers shall make such
disclosure on outsourcing activity/arrangement in its annual report as may be
specified. (2)
Notwithstanding the above,
the Competent Authority may call for details, cause inspection in respect of
any outsourcing arrangements. CHAPTER
4 MISCELLANEOUS An insurer using the
trade logo shall comply with the guidelines specified in this regard from time
to time. The Competent
Authority may issue circulars, guidelines and directions, if necessary, from
time to time, relating to Part A and Part B of these regulations including, but
not limited to, transitory provisions regarding implementation process of these
regulations. In order to remove
any doubts or difficulties that may arise in the application or interpretation
of any of the provisions of these regulations, the Competent Authority may
issue appropriate clarifications or guidelines as and when deemed necessary. (1)
The following regulations
shall be repealed from the date these regulations come into force: (a)
The Insurance Regulatory and
Development Authority (Manner of Receipt of Premium) Regulations, 2002 (b)
The Insurance Regulatory and
Development Authority of India (Places of Business) Regulations, 2015 (c)
The Insurance Regulatory and
Development Authority of India (Fee for registering cancellation or change of
nomination) Regulations 2015 (d)
The Insurance Regulatory and
Development Authority of India (Fee for granting written acknowledgement of
receipt of Notice of Assignment or Transfer) Regulations, 2015 (e)
The Insurance Regulatory and
Development Authority of India (Issuance of e-Insurance Policies) Regulations,
2016 (f)
Insurance Regulatory and
Development Authority of India (Outsourcing of Activities by Indian Insurers)
Regulations, 2017 (g)
The Insurance Regulatory and
Development Authority of India (Protection of Policyholders Interests)
Regulations, 2017 (h)
The Insurance Regulatory and
Development Authority of India (Insurance Advertisements and Disclosure)
Regulations, 2021 (2)
Unless otherwise provided by
these regulations, anything done or any action taken or purported to have been
done or taken in respect of the regulations mentioned in sub-regulation (1)
above shall be deemed to have been done or taken under the corresponding
provisions of these regulations.Insurance Regulatory And
Development Authority Of India (Protection Of Policyholders Interests,
Operations And Allied Matters Of Insurers) Regulations, 2024
policyholders interests and shall include inter-alia matters as set out in
sub-regulation
(2) and shall review it on annual basis.
cover(s) to the prospect to enable the prospect to decide on the best cover(s).