Tag Archives: IRDA

insurance returns – covid extension

IRDA has issued a circular dated 30th April, 2021 allowing time upto 31st May 2021 for all returns to be filed by insurance intermediaries – those pertaining to period ending 31st March, 2021.

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RFQ platform


Implementing RFQ platform for Investments in Corporate Bonds / Commercial Papers

1.      With a view to enhance and coalescing the fragmented liquidity in Corporate Bonds, SEBI has implemented Request for Quote (RFQ) Platform through Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The RFQ platform seeks to replicate the OTC market albeit on an electronic platform in a move to bring more transparency, centralization in protecting investor interest apart from having enough liquidity in Secondary Market.

2.     To achieve the above, SEBI, vide Circular: SEBI/HO/IMD/DF3/CIR/P/2020/130 Dated 22nd July, 2020 has mandated all Mutual Funds (MFs) to undertake 10% of their total Secondary Market trades of Corporates Bonds through RFQ to start with. As this is likely to bring transparency and liquidity in the Corporate Bond segment, the Authority, in consultation with the Life and General Insurance Councils directs all Insurers as follows:

a.     On monthly basis, the Insurers shall undertake at least 10% of their total Secondary Market trades in the Corporate Bonds in Value place / seek Quotes through one-to-many mode on RFQ platform available on BSE/NSE. The 10% limit shall be reckoned on the average of Secondary Market Trades by Value, in the immediately preceding 3 months on rolling basis.

b.     Concurrent Auditor of the Insurer in his Quarterly Audit Report shall confirm that the Insurer has complied with the directions of this Circular.

3.     The above procedure will be followed by all Insurers with effect from 1st Nov, 2020.

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systemically important insurers


1.      Domestic Systemically Important Insurers (D-SIIs) refer to insurers of such size, market importance and domestic and global inter connectedness whose distress or failure would cause a significant dislocation in the domestic financial system. Therefore, the continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy.

2.      D-SIIs are perceived as insurers that are ‘too big or too important to fail’ (TBTF). This perception and the perceived expectation of government support may amplify risk taking, reduce market discipline, create competitive distortions, and increase the possibility of distress in future. These considerations require that D-SIIs should be subjected to additional regulatory measures to deal with the systemic risks and moral hazard issues.

3.      In order to identify such insurers and to put such insurers to enhanced monitoring mechanism, the Insurance Regulatory and Development Authority of India (IRDAI) has developed a methodology for identification and supervision of D-SIIs. The parameters, as per the methodology for identification of D-SIIs, inter alia include the following:

a.            the size of operations in terms of total revenue, including premium underwritten and the value of assets under management;

b.            global activities across more than one jurisdiction;

c.             lack of substitutability of their products and/or operations; and

d.            interconnectedness through counterparty exposure and macro-economic exposure.

These parameters were assigned weights to cover various aspects of their operations. The Authority would identify D-SIIs on an annual basis and disclose the names of these insurers for public information.

4.      After analysis of data, the Authority has identified for the year 2020-21, the following insurers as D-SIIs:

a.    Life Insurance Corporation of India;

b.    General Insurance Corporation of India; and

c.     The New India Assurance Co. Ltd.

5.      Given the nature of their operations and the systemic importance of the D-SIIs, these insurers have been asked to carry out the following:

(i)         Raise the level of corporate governance;

(ii)       identify all relevant risk and promote a sound risk management culture.

6.      D-SIIs will also be subjected to enhanced regulatory supervision.

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video based KYC

IRDAI circular dated 21st September, 2020 on the subject.

In order to simplify the process of Know Your Customer (KYC), it is proposed to leverage the various electronic platforms to make it customer friendly.

2.   The Insurers are hereby permitted to use the “Video Based Identification Process (VBIP)” as described below:

3.   “Video Based Identification Process (VBIP)”is an alternative (optional)electronic process of Identification / KYC in paperless form, carried out by the insurer/authorised person (person authorised by the insurer and specifically trained for face-to-face VBIP) by undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer/beneficiary to obtain identification information including the necessary KYC documents required for the purpose of client due diligence and to ascertain the veracity of the information furnished by the customer/ beneficiary.

4.   Insurers may undertake live VBIP by developing an application which facilitates KYC process either online or face-to-face in-person verification through video. This may be used for establishment/continuation/ verification of an account based relationship or for any other services with an individual customer/beneficiary, as the case may be, after obtaining his/her informed consent and shall adhere to the following stipulations:

a)    The Insurer/authorised person while performing the VBIP for KYC shall record clear live video of the customer/beneficiary present for identification and obtain the identification information in the form as below:

                     i.    Aadhaar Authentication if voluntarily submitted by the Customer/ beneficiary, subject to notification by the government under Section 11 A of Prevention of Money-Laundering Act (PMLA)


                 ii.      Offline Verification of Aadhaar for identification, if voluntarily submitted by the Customer/beneficiary


                iii.      OVD (As defined in rule 2(d) under PML Rules 2005) provided in the following manner –

iii(1) As digitally signed document of the OVD, issued to the DigiLocker by the issuing authority


iii(2) As a clear photograph or scanned copy of the original OVD, through the eSign mechanism.

b)   The insurer/authorised person shall ensure that the online video is clear and the customer/beneficiary along with the authorised person in the video shall be easily recognisable and shall not be covering their face in any manner.

c)    Live location of the customer/beneficiary (Geotagging) shall be captured (both for online/ face-to-face VBIP) to ensure that customer/beneficiary is physically present in India.

d)   The authorised person/ Insurer shall ensure that the photograph and other necessary details of the customer/beneficiary in the Aadhaar/ OVD matches with the customer/beneficiary present for the VBIP.

e)    The authorised person/ Insurer shall ensure that the sequence and/or type of questions during video interactions are varied in order to establish that the interactions are real-time and not pre-recorded.

f)     In case of offline verification of Aadhaar using XML file or Aadhaar Secure QR Code, if voluntarily submitted by the Customer/ beneficiary, it shall be ensured that the generation of XML file or QR code is recent and not older than 3 days from the date of carrying out VBIP.

g)    All accounts opened or any service provided based on VBIP shall be activated only after being subject to proper verification by the insurer to ensure that the integrity of process is maintained and is beyond doubt.

h)   Insurers shall ensure that the process is a seamless, real-time, secured, end-to-end encrypted audio-visual interaction with the customer/ beneficiary and the quality of the communication is adequate to allow identification of the customer/ beneficiary beyond doubt. Insurers shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations.

i)     To ensure security, robustness and end to end encryption, the insurers shall carry out software and security audit and validation of the VBIP application as per extant norms before rolling it out and thereafter from time to time.

j)     The audio-visual interaction shall be triggered from the domain of the insurers itself, and not from third party service provider. The VBIP process shall be operated by the Insurer/authorized persons. The activity log along with the credentials of the official performing the VBIP shall be preserved.

k)   Insurers shall ensure that the video recording bears the GPS coordinates, date (DD:MM:YY) and time stamp (HH:MM:SS) along with other necessary details, which shall be stored in a safe and secure manner as per Prevention of Money-Laundering (PML) Rules.

While exercising Online VBIP, the Insurer shall exercise extra caution and the additional necessary details viz. IP address etc. shall be preserved by the insurer to substantiate the evidence at the time of need.

l)     Insurers are encouraged to take assistance of the latest available technology (including Artificial Intelligence (AI) and face matching technologies etc.) to strengthen and ensure the integrity of the process as well as the confidentiality of the information furnished by the customer/beneficiary. However, the responsibility of identification shall rest with the insurer.

m)  Authorized person of the insurer shall facilitate face to face VBIP process only at the customer/beneficiary end.

However, the ultimate responsibility for client due diligence will be with the insurer.

n)   Insurer shall maintain the details of the concerned Authorised person, who is facilitating the VBIP.

o)    Insurers shall ensure to redact or blackout the Aadhaar number as per extant PML Rules.

p)   Insurer will adhere to the IRDAI Cyber security guidelines as amended from time-to-time along with the necessary security features and standard as mentioned in Annexure – I

It is emphasized once again that it shall be the responsibility of the insurers that the above guideline is followed scrupulously.

Any matter not specifically mentioned herein, but mandated under the extant PMLA/ Aadhaar Act / Information Technology Act etc. and Rules framed there under by the Central Government of India shall be complied with accordingly.

Member (Life)

Annexure I

1.   The Video KYC application and related APIs/Web Services shall undergo application security testing (both gray box and white box) through an CERT-In empanelled vendor and all reported vulnerabilities shall be mitigated before moving into production.

2.   The infrastructure components used for hosting Video KYC application shall undergo vulnerability assessment and secure configuration review through an CERT-In empanelled vendor and all reported vulnerabilities shall be mitigated before moving into production.

3.   There shall be an end-to-end encryption from the customer/beneficiary to the hosting point of the Video KYC application. The minimum encryption standards and key lengths like AES 256 for encryption should be used.

4.   If the Video KYC application and video recordings are located at a third party location and/or in Cloud then the third party location and/or cloud hosting location shall be in India.

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e-insurance policies

Insurance Regulatory Development Authority of India (IRDAI) has vide its circular dated 10th September, 2020 allowed insurance companies to digitally issue insurance policies subject to taking proper precautions and following proper systems and procedures as laid down. They have also dispensed with the requirement of physical documents including wet signatures from the insured persons again subject to following certain precautions and steps involved. This will be applicable as a short term measure due to the covid pandemic, upto 31st March, 2021. Gist of the IRDAI circular is given below:

Re: (a) Issuance of Electronic Policies and (b) dispensing with physical documents and wet signature on the proposal form

This has reference to Regulation 4 of IRDAI (Issuance of e-Insurance policies) Regulations,2016 and Regulation 18read with Regulation 8 (1) of IRDAI (Protection of Policyholders’ Interests) Regulations, 2017.

2. In the wake of Covid-19 pandemic, based on representations received from insurers, the Authority, in exercise of powers vested under proviso to Regulation 4(iii) of IRDAI (Issuance of e-Insurance policies) Regulations,2016 hereby grants exemption to insurers from the requirement of (a) issuing policy document and (b) copy of the proposal in physical form in respect of the following, subject to insurers complying with certain requirements as stated in Para 3 of this circular.

      i.        All Motor Insurance policies

    ii.        Fire Insurance policies covering Dwellings and/or contents thereof issued to individuals

   iii.        All package insurance policies issued to individuals (e.g. package policies for Dwellings)

   iv.        All Miscellaneous policies issued to individuals where the Sum Insured does not exceed Rs. 5 Crore.

3. Issue of electronic policies: The above exemption for issue of electronic policies is granted subject to the following:

      i.        Insurers shall send the policy document and a copy of the proposal form through digital/electronic mode. The documents shall be sent to the registered e-mail id or mobile number provided by the customer only on the specific consent provided by the policyholder.

    ii.        Simultaneously the policyholders shall be informed through SMS that policy document /copy of the proposal form have been sent to their e-mail id or any other digital / electronic mode (as may be the case).

   iii.        Insurers shall put in place proper mechanism to ensure that the documents are delivered to the designated e-mail Id / mobile number of the policyholder and an acknowledgement is appropriately obtained / auto-collected on delivery.

   iv.        When documents are forwarded by electronic means, the record of policyholder having received the document or the electronic platform having delivered the documents shall be maintained systematically. It shall be clearly informed to the policyholder that the date of delivery of the document is reckoned for the purpose of examining free-look requests, wherever applicable.

    v.        Insurers shall preserve the records of such acknowledgements for further reference.

   vi.        The policy document sent electronically shall contain all the schedules, terms and conditions, benefits etc that are otherwise available in the physical document.

  vii.        Policyholders shall be also informed that printing of physical policy document and dispatch of the same along with the copy of proposal form may be delayed due to operational difficulties in the wake of ongoing COVID-19 pandemic situation.

viii.        Policyholders shall be informed that the policy document sent electronically is as valid as the physical policy contract / document.

   ix.        Wherever policyholders demand the physical version of the policy document /copy of the proposal, the same shall be made available.

    x.        Wherever it is not possible to send the policy documents through electronic means due to any reason, insurers shall necessarily forward the physical documents to the policyholders.

4. Dispensing of Wet Signature on Proposal Form: With regard to the requirement under Regulation 8 (1) of IRDAI (Protection of Policyholders’ Interests) Regulations, 2017 in respect of proposal forms, Insurers are hereby allowed to obtain the customer’s consent without requiring wet signature on the hard copy of the proposal form subject to following:

      i.        The completed proposal form shall be sent to the prospect on his/ her registered e-mail ID or mobile number by means of a message with a link, as the case may be.

    ii.        If the proposer wishes to give consent to the proposal, the same may be permitted by providing a link for confirmation or through One Time Password (OTP) duly validated.

   iii.        Insurers shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form.

   iv.        Insurers shall be responsible for the following:

a)    Providing approved digital sales material to insurance agents/intermediaries and ensure that only that material is used while soliciting the business;

b)    Authenticating the e-mail IDs / mobile numbers of the proposers including through de-duplication of the data and such other means;

c)    Ensuring the suitability of the product being sold

5.  The exemptions granted herein shall be valid till 31.03.2021.


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wellness features in insurance policies

IRDA circular dated 4th September 2020 on adding wellness features to life insurance polices by life, general & health insurance companies – what is allowed, what is not allowed, what approvals to be taken etc. Gist of circular follows:

Reference is invited to Chapter VII of the Consolidated Guidelines on Product Filing in Health Insurance Business issued vide Circular Ref: IRDAI/HLT/REG/CIR/194/07/2020 dated 22nd July, 2020 specifying norms on Wellness features. In supersession of these Guidelines on wellness features / benefits, under the provisions of Sec 34(1) of the Insurance Act 1938, read with Regulation 8(d) and 19 of IRDAI (Health Insurance) Regulations 2016, the following norms are prescribed:

a.    Any wellness and preventive feature shall be designed only with the objective of maintaining and improving good health, thereby enabling affordable health insurance.

b.    As part of promoting wellness and preventive regime, insurers may offer reward points to those policyholders who comply with or meet the set criteria of wellness and preventive features.

c.    No Wellness and preventive feature shall be offered without it being filed or incorporated as part of the product in terms of the Product Filing Guidelines. The methodology and criteria to be used for arriving at the reward points and corresponding reward points to be awarded need to be filed.

d.    Wellness and preventive features under a policy may also be offered either as optional or add-on cover.

e.    There shall be no discrimination in providing any of the wellness and preventive features offered and in granting the reward points thereunder to the same or similarly placed categories of policyholders of the underlying health insurance product. 

f.     Every Insurer shall assess the pricing impact of wellness and preventive features offered, if any, and the same shall be disclosed upfront in the File and Use or Use and File application, as may be the case, as specified in the Product Filing Guidelines.

g.    Based on criteria stipulated for wellness and fitness, insurers may endeavor promoting wellness amongst health insurance policyholders by offering the following services:

                     i)        Health specific services provided by Network providers or other empanelled hospitals / service providers for the following (in addition to any such benefits already offered):

a)    Outpatient consultations or treatments

b)    Pharmaceuticals

c)    Health check-ups/diagnostics

Including discounts on all the above.

                    ii)        Redeemable vouchers to obtain health supplements.

                   iii)        Redeemable vouchers for membership in:

a) Yoga centers

b) Gymnasiums

c) Sports clubs

d) Fitness centers for participating in fitness activities.

                   iv)        Discounts on premiums and/or increase in sum insured at the time of renewals based on wellness regime followed by policyholders in the preceding policy period; provided increase in sum insured shall be independent and shall not be linked to the cumulative bonus offered, if any.

                    v)        Coverage of cost of treatment of any admissible claim in respect of non-payable items that are specified under the terms and conditions of the base policy.

Provided, where more than one reward is offered, choice shall be given to the policyholder to choose as per his/her requirement or need.

h.    Insurers shall not publish the trade names or trade logos of third party merchandize in any of the insurance advertisements, but may refer the services in generic term. However, Insurers shall disclose the specific items of services in their website with necessary details and may provide a link to this in their insurance advertisement and policy contracts.

Provided insurers shall not promote products or services of any particular third party service provider.

Provided further, where multiple service providers are engaged by the insurers for providing benefits / services, the policyholders shall be allowed to choose a service provider of their choice for availing the wellness benefits / services.

i.      Insurers shall endeavour to engage multiple service providers for providing benefits / services under wellness and preventive features and the list of service providers may be constantly expanded by the Insurers. Insurers shall not accept any liability towards quality of the services made available by third parties and shall specify upfront that the said third party is responsible for providing the services stipulated under the wellness features and insurer is not liable for any defects or deficiencies on the part of the service provider. Insurers shall monitor the quality of service offered by service providers under wellness / preventive programs and ensure that they have put in place appropriate mechanism to discharge their obligations provided under wellness program of the applicable health insurance product.

j.      Other than the monetized value of the reward points redeemed by the policyholders, no payments shall be made by insurers to the third party merchants.

k.    Insurers shall not receive any consideration amount for offering the third party services.

l.      The operational costs, if any, for administering wellness and preventive features shall be factored into the pricing of the underlying health insurance product and costs factored shall be disclosed in the prospectus or sales literature (invitation to contract) wherever wellness and preventive features are offered.

m.  In case of Family Floater Plans, Insurers shall clearly define and disclose in policy document, the manner in which accrual and redemption of rewards is considered in respect of all members covered.

n.    Insurers shall clearly specify in the policy contract as to whether the accrued rewards can be carried forward or not when the policy is renewed with the Insurer and the period of validity of the accrued rewards under both the scenarios. In case of expiry of policy, the accrued rewards may be carried forward for a period not exceeding three months.

o.    The rewards accrued shall be at periodic intervals at rates/amounts declared upfront at the commencement of the policy and shall not be linked to any dynamic factor such as interest rate. The same shall be specified in the Policy Document.

p.    Insurer shall notify the rewards accrued to the credit of a Policyholder and entitlements of the policyholders under the wellness and preventive features at periodic intervals, at least once in a year.

q.    Insurer shall specify in the policy contract and prospectus, the mode of communication that the Insurer adopts for notification of various services offered under the wellness and preventive features.

r.     Insurers shall specify the manner of redeeming the rewards accrued under the wellness and preventive features in the prospectus, policy wordings and shall disclose updated information in their website.

s.    Insurer shall be responsible for any errors or omission in calculation of accrued rewards and shall address the same through their in-house Grievance Redressal Mechanism.

t.     Information gathered, if any, during the process of offering the wellness and preventive features of the policy, shall be kept confidential and shall not be used for purposes other than what it is meant for.

2.    The Authority reserves the right to reject wellness and preventive features proposed by the insurer if they are against policyholders’ interests and are not in line with fair market conduct notwithstanding the fact that they may broadly meet with the above guidelines.

3.    The Authority reserves the right to instruct the insurers to withdraw any wellness and preventive feature which is not in compliance with any regulations or guidelines issued by the Authority or which is found to be prejudicial to the interests of the policyholders or not in line with fair market conduct. The Authority also reserves the right in such cases to take appropriate action as deemed fit.

4.    Existing products may be modified either as per Clause (C) of Chapter III or Clause III (2) of Chapter IV of Consolidated Guidelines on Product Filing in Health Insurance Business (Ref. No: IRDAI/HLT/REG/CIR/194/07/2020 dated 22nd July, 2020) for offering wellness and preventive features in compliance to these guidelines.

5.    These Guidelines shall come into force with immediate effect.

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policy holders’ signatures

IRDAI has vide its circular dated 5th August, 2020 dispensed with the need for physical wet signatures on insurance forms on a temporary basis upto 31st December, 2020 due to the covid pandemic.

Instead they have put in place a system to obtain policy holders consent via OTP system with audit trail and maintaining copy of the e-consent with them.

1.    Life Insurers are allowed to obtain the customer’s consent without requiring wet signature on the hard copy of the proposal form, for the business solicited by insurance agents / intermediaries subject to following:

a.    The completed proposal form shall be sent to the prospect on his/ her registered e-mail ID or mobile number in the form of an e-mail or a message with a link as the case may be.

b.    The prospect, if he / she wishes to consent to the proposal, may do so by clicking the confirmation link or by validating the OTP shared. The Insurer shall maintain verifiable, legally valid evidence for the proposer’s consent received for the fully completed proposal form. Further, the insurer shall not accept any payment of moneys towards proposal deposit till the receipt of consent of the proposer.

c.    In all such cases, the agent / intermediary shall confirm that only the approved sales material has been used during the solicitation process. They shall also certify the authenticity of the e-mail ID and/or mobile number of the prospect.

2.    The Insurers shall be responsible for:

a.    Providing to the insurance agents / intermediaries approved digital sales material and ensuring that only such material is used while soliciting the business;

b.    Authenticating the e-mail IDs / mobile numbers of the prospects by conducting de-duplication of such data and other such means;

c.    Ensuring the suitability of the product being purchased;

d.    Carrying out pre-issuance verification calls in respect of all such proposals.

This system is to be put in place only for pure risk products not involving any savings element.

Copy of IRDA circular can be found at https://www.irdai.gov.in/ADMINCMS/cms/Circulars_Layout.aspx?page=PageNo4210

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Health Insurance Policy contracts – standard terms & clauses

IRDA has issued a circular dated 11th June, 2020 wherein it has stipulated standardized terms & clauses in indemnity based health insurance policy contracts (except personal accident insurance and domestic / overseas travel policy). This comes into effect from 1st October 2020 and in case of renewals from 1st April, 2021 onwards.


Objective of this is to standardise the clauses in these contracts.

Gist of the standardized terms & clauses are given below

StandardGeneralTerms and Clauses:

1      Disclosure of Information

The policy shall be void and all premium paid thereon shall be forfeited to the Company in the event of misrepresentation, misdescription or non-disclosure of any material fact by the policyholder.

(Explanation: “Material facts” for the purpose of this policy shall mean all relevant information sought by the company in the proposal form and other connected documents to enable it to take informed decision in the context of underwriting the risk)

2      Condition Precedent to Admission of Liability

The terms and conditions of the policy must be fulfilled by the insured person for the Company to make any payment for claim(s) arising under the policy.

3      Claim Settlement (provision for Penal Interest)

             i.       The Company shall settle or reject a claim, as the case may be, within 30 days from the date of receipt of last necessary document.

            ii.       In the case of delay in the payment of a claim, the Company shall be liable to pay interest to the policyholder from the date of receipt of last necessary document to the date of payment of claim at a rate 2% above the bank rate.

           iii.       However, where the circumstances of a claim warrant an investigation in the opinion of the Company, it shall initiate and complete such investigation at the earliest, in any case not later than 30 days from the date of receipt of last necessary document. In such cases, the Company shall settle or reject the claim within 45 days from the date of receipt of last necessary document.

           iv.       In case of delay beyond stipulated 45 days, the Company shall be liable to pay interest to the policyholder at a rate 2% above the bank rate from the date of receipt of last necessary document to the date of payment of claim.

(Explanation: “Bank rate” shall mean the rate fixed by the Reserve Bank of India (RBI) at the beginning of the financial year in which claim has fallen due)

(Note to Insurers: The Clause shall be suitably modified by the insurer based on the amendment(s), if any to the relevant provisions of Protection of Policyholder’s Interests Regulations, 2017)

4      Complete Discharge

Any payment to the policyholder, insured person or his/ her nominees or his/ her legal representative or assignee or to the Hospital, as the case may be, for any benefit under the policy shall be a valid discharge towards payment of claim by the Company to the extent of that amount for the particular claim.

5      Multiple Policies

              i.    In case of multiple policies taken by an insured person during a period from one or more insurers toindemnify treatment costs, the insured person shall have the right to require a settlement of his/herclaim in terms of any of his/her policies. In all such cases the insurer chosen by the insured person shall be obliged to settle theclaim as long as the claim is within the limits of and according to the terms of the chosen policy.

             ii.    Insured person having multiple policies shall also have the right to prefer claims under this policy for the amounts disallowed under any other policy / policies even if the sum insured is not exhausted. Then the insurershall independently settle the claim subject to the terms and conditions of this policy.

            iii.    If the amount to be claimed exceeds the sum insured under a single policy, the insured person shall have the right to choose insurer from whomhe/she wants to claim the balance amount.

           iv.    Where an insured person has policies from more than one insurer to cover the same risk onindemnity basis, the insured person shall only be indemnified the treatment costs in accordancewith the terms and conditions of the chosen policy.

6      Fraud

If any claim made by the insured person, is in any respect fraudulent, or if any false statement, or declaration is made or used in support thereof, or if any fraudulent means or devices are used by the insured person or anyone acting on his/her behalf to obtain any benefit under this policy, all benefits under this policy and the premium paid shall be forfeited.

Any amount already paid against claims made under this policy but which are found fraudulent later shall be repaid by all recipient(s)/policyholder(s), who has made that particular claim,who shall be jointly and severally liable for such repayment to the insurer.

Forthepurposeofthisclause,theexpression”fraud”meansanyofthefollowingactscommittedbytheinsured personorbyhisagentor the hospital/doctor/any other party acting on behalf of the insured person, withintenttodeceivetheinsurerortoinducetheinsurertoissueaninsurancepolicy:

a)    the suggestion, as a fact of that whichisnottrueandwhichtheinsured persondoes not believetobetrue;

b)    theactive concealmentof afactbytheinsured personhavingknowledgeorbeliefofthefact;

c)    anyother act fitted to deceive; and

d)    anysuchactoromissionasthelawspeciallydeclarestobefraudulent

The Company shall not repudiate the claim and / or forfeit the policy benefits on the ground of Fraud, if the insured person / beneficiary can prove that the misstatement was true to the best of his knowledge and there was no deliberate intention to suppress the fact or that such misstatement of or suppression of material fact are within the knowledge of the insurer.

7      Cancellation

i.         The policyholder may cancel this policy by giving 15days’ written notice and in such an event, the Company shall refund premium for the unexpired policyperiod as detailed below.

(Note to Insurers: Insurer shall specify the method of refund calculation)

Notwithstanding anything contained herein or otherwise, no refunds of premium shall be made in respect of Cancellation where, anyclaim has been admitted or has been lodged or any benefit has been availed by the insured person under the policy.

(Note to insurers: Insurer may relax this condition as per the product design)

ii.       The Company may cancel thepolicy at any time on grounds of misrepresentation non-disclosure of material facts, fraud by the insured personby giving 15 days’ written notice. There would be no refund of premium on cancellation on grounds of misrepresentation, non-disclosure of material facts or fraud.

8      Migration

The insured person will have the option to migrate the policy to other health insurance products/plans offered by the company by applying for migration of the policyatleast30 days before the policy renewal date as per IRDAI guidelineson Migration. If such person is presently covered and has been continuously covered without any lapses under any health insurance product/plan offered by the company,the insured person will get the accrued continuity benefits in waiting periods as per IRDAI guidelines on migration.

For DetailedGuidelines on migration, kindly refer the link ………

(Note to Insurers: Insurer to provide link to the IRDAI guidelineson migration.Timelines for applying for migration may be relaxed by the insurer subject to product design)

9      Portability

The insured person will have the option to port the policy to other insurers by applying to suchinsurer to port the entire policy along with all the members of the family, if any, at least 45 days before, but not earlier than 60 days from the policy renewal date as per IRDAI guidelines related to portability. If such person is presently covered and has been continuously covered without any lapses under any health insurance policy with an Indian General/Health insurer, the proposed insured person will get the accrued continuity benefits in waiting periods as per IRDAI guidelines on portability.

For Detailed Guidelines on portability, kindly refer the link ………

(Note to Insurers: Insurer to provide link to the IRDAI guidelines related to portability.Timelines for applying for portability may be relaxed by the insurer subject to product design)

10   Renewal of Policy

The policy shall ordinarily be renewable except on grounds of fraud, misrepresentation by the insured person.

i.      The Company shall endeavor to give notice for renewal. However, the Company is not under obligation to give any notice for renewal.

ii.    Renewal shall not be denied on the ground that the insured person had made a claim or claims in the preceding policy years.

iii.    Request for renewal along with requisite premium shall be received by the Company before the end of the policy period.

iv.   At the end of the policy period, the policy shall terminate and can be renewed within the Grace Period of …… days (Note to insurers: Insurer to specify grace period as per product design) to maintain continuity of benefits withoutbreak in policy. Coverage is not available during the grace period.

v.    No loading shall apply on renewals based on individual claims experience.

11   Withdrawal of Policy

          i.       In the likelihood of this product being withdrawn in future, the Company will intimate the insured person about the same 90 days prior to expiry of the policy.

         ii.       Insured Person will have the option to migrate to similar health insurance product available with the Company at the time of renewal with all the accrued continuity benefits such as cumulative bonus, waiver of waiting period. as per IRDAI guidelines, provided the policy has been maintained without a break.

12   Moratorium Period

After completion of eight continuous years under the policy no look back to be applied. This period of eight years is called as moratorium period. The moratorium would be applicable for the sums insured of the first policy and subsequently completion of 8 continuous years would be applicable from date of enhancement of sums insured only on the enhanced limits. After the expiry of Moratorium Period no health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract. The policies would however be subject to all limits, sub limits, co-payments, deductibles as per the policy contract.

13   Premium Payment in Instalments (Wherever applicable)

If the insured person has opted for Payment of Premium on an instalment basis i.e. Half Yearly, Quarterly or Monthly, as mentioned in the policy Schedule/Certificate of Insurance, the following Conditions shall apply (notwithstanding any terms contrary elsewhere in the policy)

i.         Grace Period of ___ (Note to Insurers: Insurer to specify grace period as per product design) days would be given to pay the instalment premium due for the policy.

ii.       During such grace period, coverage will not be available from the due date of instalment premium till the date of receipt of premium by Company.

iii.      The insured person will get the accrued continuity benefit in respect of the “Waiting Periods”, “Specific Waiting Periods” in the event of payment of premium within the stipulated grace Period.

iv.     No interest will be charged If the instalment premium is not paid on due date.

v.       In case of instalment premium due not received within the grace period, the policy will get cancelled.

vi.     In the event of a claim, all subsequent premium instalments shall immediately become due and payable.

vii.    The company has the right to recover and deduct all the pending installments from the claim amount due under the policy.

14   Possibility of Revision of Terms of the Policy Including the Premium Rates

The Company, with prior approval of IRDAI, may revise or modify the terms of the policy including the premium rates. The insured person shall be notified three months before the changes are effected.

15   Free look period

The Free Look Period shall be applicable on new individual health insurance policies and not on renewals or at the time of porting/migrating the policy.

The insured person shall be allowed free look period of fifteen days from date of receipt of the policy document to review the terms and conditions of the policy, and to return the same if not acceptable.

If the insured has not made any claim during the Free Look Period, the insured shall be entitled to

i.      a refund of the premium paid less any expenses incurred by the Company on medical examination of the insured person and the stamp duty charges or

ii.    where the risk has already commenced and the option of return of the policy is exercised by the insured person, a deduction towards the proportionate risk premium for period of coveror

iii.   Where only a part of the insurance coverage has commenced, such proportionate premium commensurate with the insurance coverage during such period;

(Note to insurers: Insurer may increase the free look period as per the product design)

16   Redressal of Grievance

In case of any grievance the insured person may contact the company through


Toll free:


Fax :


Insured person may also approach the grievance cell at any of the company’s branches with the details of grievance

If Insured person is not satisfied with the redressalof grievance through one of the above methods, insured person may contact the grievance officerat ………….

For updated details of grievance officer, kindly refer the link……….

(Note to insurers: Address of the Grievance Officer and link having updated details of grievance officer on website to be specified by the insurer. Insurer to also specify separate contact details for senior citizens)

If Insured person is not satisfied with the redressalof grievance through above methodstheinsured person may also approach the office of Insurance Ombudsman of the respective area/region for redressal of grievanceas per Insurance Ombudsman Rules 2017. (Note to insurers: Insurer to specify the latest contact details of offices of Insurance Ombudsman)

Grievance may also be lodged at IRDAI Integrated Grievance Management System – https://igms.irda.gov.in/

17   Nomination:

The policyholder is required at the inception of the policy to make a nomination for the purpose of payment of claims under the policy in the event of death of the policyholder. Any change of nomination shall be communicated to the company in writing and such change shall be effective only when an endorsement on the policy is made. In the event of death of the policyholder, the Company will pay the nominee {as named in the Policy Schedule/Policy Certificate/Endorsement (if any)} and in case there is no subsisting nominee, to the legal heirs or legal representatives of the policyholder whose discharge shall be treated as full and finaldischarge of its liability under the policy.

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IRDA (Insurance Regulatory Development Authority) has issued a circular dated 5th June, 2020 wherein it has mandated that all insurers and also corporate borrowers from insurance companies who have borrowed Rs.50 crores or more shall have to obtain Legal Entity Identifier, a 20 character unique identity code issued by Legal Entity Identifier India Ltd.

Legal Entity Identifier is a global reference number that uniquely identifies every legal identity or structure that is party to a financial transaction in any jurisdiction. The structure of the global LEI is determined in detail by ISO Standard 17442 and takes into account Financial Stability Board (FSB) stipulations.


At the time of the financial crisis of 2007–2008, regulators realised that a single identification code unique to each financial institution was not available worldwide. It means that each country had different code systems to recognize the counterpart corporation of financial transactions. Accordingly, it was impossible to identify the transaction details of individual corporations, identify the counterpart of financial transactions, and calculate the total risk amount. This resulted in difficulties in estimating individual corporation’s amount of risk exposure, analyzing risks across the market, and resolving the failing financial institutions. This is one of the factors that made it difficult for the early evolution of the financial crisis.

In response, the LEI system was developed by the 2011 G20[2] in response to this inability of financial institutions to identify organisations uniquely, so that their financial transactions in different national jurisdictions could be fully tracked.


IRDA circular can be found here


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Banks entering insurance business

RBI has issued guidelines on Banks entering into insurance business. These guidelines can be viewed at


Gist of the guidelines are given below:

Guidelines for Banks undertaking Insurance Broking and Agency Business Banks may undertake insurance agency or broking business departmentally and/or through subsidiary, subject to the following stipulations:
1. Board Approved Policy
A comprehensive Board approved policy regarding undertaking insurance distribution, whether under the agency or the broking model should be formulated and services should be offered to customers in accordance with this policy. The
policy will also encompass issues of customer appropriateness and suitability as well as grievance redressal. It may be noted that as IRDA Guidelines do not permit group entities to take up both corporate agency and broking in the same group even through separate entities, banks or their group entities may undertake either insurance broking or corporate agency business.
2. Compliance with IRDA guidelines
a) The IRDA (Licensing of Corporate Agents) Regulations, 2002/ IRDA (Licensing of Banks as Insurance Brokers) Regulations, 2013 and the code of conduct prescribed by IRDA, as amended from time to time, as applicable, should be complied with by banks undertaking these activities.
b) The deposit to be maintained by an insurance broker as per the IRDA (Licensing of Banks as Insurance Brokers) Regulations, 2013, as amended from time to time, should be maintained with a scheduled commercial bank other than itself.
3. Ensuring Customer Appropriateness and Suitability While undertaking insurance distribution business, either under the corporate agency or broking model under the relevant IRDA Regulations, banks must keep the following in view:
a) All employees dealing with insurance agency/ broking business should possess the requisite qualification prescribed by IRDA.
b) There should be a system of assessment of the suitability of products for customers. Pure risk term products with no investment or growth components that are simple and easy for the customer to understand will be deemed universally
suitable products. More complex products with investment components will require the bank to necessarily undertake a customer need assessment prior to sale. It should be ensured that there is a standardized system of assessing the needs of the customer and that initiation/transactional and approval processes are segregated.
c) Banks should treat their customers fairly, honestly and transparently, with regard to suitability and appropriateness of the insurance product sold.
4. Prohibition on Payment of Commission/Incentive directly to Bank Staff
There should be no violation either of Section 10(1)(ii) of the BR Act, 1949 or the guidelines issued by IRDA in payment of commissions/brokerage/incentives. This may be factored in while formulating a suitable performance assessment and
incentive structure for staff. Further, it must be ensured that no incentive (cash or non-cash) should be paid to the staff engaged in insurance broking/corporate agency services by the insurance company.
5. Adherence to KYC Guidelines
The instructions/ guidelines on KYC/AML/CFT applicable to banks, issued by RBI from time to time, may be adhered to, in respect of customers (both existing and walk-in) to whom the services of insurance broking/agency are being provided.
6. Transparency and Disclosures
a) The bank should not follow any restrictive practices of forcing a customer to either opt for products of a specific insurance company or link sale of such products to any banking product. It should be prominently stated in all publicity material distributed by the bank that the purchase by a bank’s customer of any insurance products is purely voluntary, and is not linked to availment of any other facility from the bank.
b) Further, the details of fees/ brokerage received in respect of insurance broking/agency business undertaken by them should be disclosed in the ‘Notes to Accounts’ to their Balance Sheet.
7. Customer Grievance Redressal Mechanism
A robust internal grievance redressal mechanism should be put in place along with a Board approved customer compensation policy for resolving issues related to services offered. It must also ensure that the insurance companies whose products are being sold have robust customer grievance redressal arrangements in place. Further, the bank must facilitate the redressal of grievances.
8. Penal Action for Violation of Guidelines
Violation of the above instructions will be viewed seriously and will invite deterrent penal action against the banks.

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FDI in insurance sector – revised guidelines

The Department of Industrial Policy & Promotion, New Delhi (DIPP) has vide its press release no. 2/2014 dated 4/2/2014 revised the FDI limits in the insurance sector in the country. Hitherto, FDI in insurance was allowed upto 26% in the automatic route, subject however to the conditions that the companies bringing in FDI will obtain the necessary license from the sector regular i.e. IRDA. Under the old guidelines, only FDI was allowed in the insurance sector. FII and NRI investment was not allowed. 

The revised guidelines allows 26% by way of FDI or FII or NRI investment on automatic route. Further the guidelines are relaxed not only for insurance companies, but also for insurance brokers, Third Party Administrators (TPAs) and Surveyors & Loss Assessors. The other conditions of obtaining license from IRDA still continues. Bank promoted insurance companies also need to comply with sectoral guidelines in the FDI policy related to the banking sector. 

The revised guidelines can be found at this link viz. http://dipp.nic.in/English/acts_rules/Press_Notes/pn2_2014.pdf

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e-KYC services of UIDAI for insurance companies

IRDA has mandated vide its circular dated 21st October 2013 that e-KYC services of UIDAI can be accepted as valid KYC documents by all the insurance companies. This has been made possible pursuant to the amendment to the Prevention of Money Laundering Act wherein UIDAI identity has been made acceptable for KYC purposes. Further with UIDAI going the e-way by adopting e-UIDAI it is but natural that a boost has been given to the KYC process of UIDAI. IRDA circular is given below


Ref:IRDA/SDD/CIR/AML/207/10/2013 Date:21-10-2013
e-KYC services of UIDAI
Attention is drawn to the following circulars issued by the Authority:
i.      IRDA/F&I/CIR/AML/151 /07/2011 dated July 5, 2011 wherein insurers were informed of the amendments to the Prevention of Money Laundering (Maintenance of Records) Amendment Rules 2010 by which “the letter issued by the Unique Identification Authority of India containing details of name, address and Aadhaar number” was considered as officially valid document that may be obtained as part of Customer Identification Procedure, for the purposes of identification. 
ii.    Master Circular 2010 on AML/CFT guidelines clause 3.1.1 (iv) wherein it has been indicated that “No further documentation is necessary for proof of residence where the document of identity submitted also gives the proof of residence.”
2.         You may be aware that the Unique Identification Authority of India (UIDAI) has  operationalized e-KYC services recently. The acceptability of these services for KYC purposes under the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, was discussed with the Department of Revenue, Ministry of Finance and operational issues were taken up with the insurers.
3.         Now, following confirmation from the Ministry that e-KYC services may be accepted as a valid process for KYC verification under the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, it has been decided that e-KYC services of UIDAI is acceptable for KYC verification subject to specific and express consent of the customer to access his/her data through UIDAI system.
4.         It may further be noted that in cases where e-KYC services are availed for KYC verification, certification requirements under clause 3.1.1 (iv) of the Master Circular (2010) AML/CFT guidelines shall be deemed to be complied with.
5.         Insurers may take note of the above.
(R.K. Nair)
Member (F&I)


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Guidelines for Insurance Agents Training Institutes – Scope for CS

The IRDA (Insurance Regulatory and Development Authority) has issued on 1st August 2013 comprehensive guidelines on establishment/ renewal of Agents Training Institutes for both life as well as non life insurance products.

It stipulates a pre-qualification for such institutes to come into force such as proven track record of minimum 3 years, establishment as company or society or trust,  It also stipulates training period, attendance of faculty as well as students, minimum class strength etc.

The qualification of a faculty is also specified such as managerial experience for 5 years with any insurer or having any specified qualifications such as B.Tech., Degree from a recognised University or professionals such as CS, CWA, CA etc. The training centre needs to have at least one permanent full time faculty for each stream i.e. life and non-life. So there is scope for a CS to become a faculty in a Insurance Training Centre. Obviously he needs to be having insurance background and has worked in insurance field for many years in order to teach the subject. There is also a requirement that the candidate should have undergone a 3 day training workshop either with NIA, III, IIRM but this is not a hindrance. But this is a welcome move by the IRDA to recognise the CS as one of the qualifications suited for the purpose of being appointed as a faculty in an Insurance Training Centre.

The copy of the circular can be found at http://www.irda.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo2028&flag=1

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