IRDAI (Insurance Products) Regulations, 2024

IRDAI (Insurance Products) Regulations, 2024

The IRDAI (Insurance Products) Regulations, 2024 ("Product Regulations"),¹ were issued to facilitate the development of innovative insurance products and offer a swift response to the evolving market demands. They apply to insurers who have been granted certificate of registration to transact the business of life insurance or general insurance or health insurance. It encourages the development of products for different segments/strata of the society while protecting the interests of policyholders and maintaining regulatory compliance. It lays down the principles to be followed by an insurer in product design and development cycle of insurance products. These regulations repeal 6 (six) regulations.² Subsequently, 3 (three) master circulars on 'health insurance', 'general insurance', and 'life insurance' products were issued to supplement the Product Regulations. The key provisions of these master circulars are set out below.

Master circular on health insurance business

A master circular was issued providing guidance on various provisions of Product Regulations relating to health insurance.³ It applies to all life, general and health insurers. Some of the key provisions of the circular are as follows:

1. existing products which are not complying with Product Regulations and this master circular must be modified on or before September 30, 2024;
2. wider choice must be provided by insurers by making available products/add-ons/riders by offering diverse insurance products catering to all ages, regions, occupational categories, medical conditions/ treatments, all types of hospitals and health care providers to suit the affordability of the policyholders/prospects;
3. insurers should endeavor to cover technological advancements and treatments;
4. guidelines on insurance product which include free look period, payment of premium, renewal, portability, cashless facility, settlement of claims, and no claim bonus;
5. introduction of 'Customer Information Sheet', which is to be provided by the insurer, along with every policy document, which explains the basic features of insurance policies in simple words; and
6. customer must be provided with the flexibility to choose products/add-ons/riders as per his/her medical conditions/specific needs.

Master circular on general insurance business

This master circular provides guidance on various provisions of Product Regulations relating to the operational aspects of general insurance products.⁴ It applies to all general insurers and to every existing general insurance product and add-on covers. Some of the key provisions of the circular are as follows:

1. availability of wider choices of products/add-ons covering customer assets, risks, properties, liabilities against various perils, exposures and lines of business;
2. possibility of customisation of products and flexibility to choose products as per customer's needs;
3. guidelines on insurance product which include payment of premium, renewal, cashless facility, settlement of claims, and no claim bonus;
4. introduction of a 'Customer Information Sheet' to provide clear and concise policy details, including scope of coverage, exclusions, warranties, and claim settlement processes;
5. broad principles introduced for compliance by insurers, by providing oversight and governance mechanism to be strengthened for various stages of insurance contract; and
6. work allocation to be done on a random basis in an automated manner without human intervention through a tech-based solution, to ensure equitable and fair opportunities to the surveyors and loss assessors.

Master circular on life insurance products

This master circular provides guidance on various provisions of Product Regulations,⁵ and applies to all life insurers. Some of the key provisions of the master circular are as follows:

1. a 'Customer Information Sheet' must be provided with every policy in the prescribed format along with the policy document explaining in simple words the basic features of a policy;
2. facility of policy loan is mandatory for all life insurance savings products, enabling policyholders to meet liquidity requirements;
3. guidelines on insurance product which include free look period, payment of premium, renewal, cashless facility, settlement of claims, and no claim bonus; and
4. . the free look period, allowing policyholders to review the terms and conditions, is extended from 15 (fifteen) days to 30 (thirty) days.

Footnotes

1 Notification dated March 20, 2024. F. No. IRDAI/Reg/8/202/2024

2 The repealed regulations are IRDAI (Micro Insurance) Regulations, 2015; IRDAI (Minimum Limits for Annuities and other benefits) Regulations, 2015; IRDAI (Acquisition of Surrender and Paid-up values) Regulations, 2015; IRDAI (Health Insurance) Regulations, 2016; IRDAI (Unit Linked Insurance Products) Regulations, 2019; and IRDAI (Non-Linked Insurance Products) Regulations, 2019.

3 Circular dated May 29, 2024. IRDAI/HLT/CIR/PRO/84/5/ 2024

4 Circular dated June 11, 2024. F. No. IRDAI/NL/MSTCIR/MISC/90/6/2024

5 Circular dated June 12, 2024. F. No. IRDAI/ACTL/MSTCIR/MISC/89/6/2024.

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