The Insurance Regulatory and Development Authority of India (IRDAI) has simplified many rules related to insurance policies. Under this policy holders can cancel their insurance policy subject to certain conditions. Along with this, the policyholders will also be able to get a refund of the remaining period of insurance. At the same time, under IRDA’s new rules, now general insurance companies can no longer reject claims due to lack of documentation.
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Refund even on cancellation of policy
IRDA has issued a master circular explaining the new rules regarding insurance policies. IRDA said- If the policyholder cancels the policy, he need not give the reason. If the customer cancels the policy the insurer must refund the premium proportionately for the unlimited policy period. However, it is important that the policy term is for one year and no claim is made during this period. In respect of policies having a term of more than one year, the refund premium should be made for the unlimited policy period. According to the circular, the insurance company can cancel the policy only on proof of fraud. For this the insurer can give at least 7 days notice.
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Claim not rejected for lack of documents
As per the IRDAI circular, claims should not be rejected in the absence of documents. Necessary documents should be procured while accepting this proposal. The customer may be asked to submit only those documents that are directly related to the settlement of the claim. Under this comes documents like driving license, permit, fitness, FIR, untraced report, postmortem report etc.
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Customers will understand in simple language
The IRDAI circular states that every customer should be given a Customer Information Sheet (CIS). Under this, customers will be able to know about the policy in simple terms. This will explain the basic features. In this, information including scope of coverage, add-ons, basis of sum assured, sum assured, special conditions and warranties, claim procedure and other information will be available at one place.