Irdai Proposes 30-Day 'Free Look' Period for Insurance Policies

New Delhi, Feb 14 (PTI) Regulator Irdai on Wednesday proposed to increase the "free look" period for return of the policy to 30 days and make nomination mandatory for life policies.

Currently, a policyholder can examine the insurance policy and opt out if not satisfied with any of the terms and conditions mentioned in the policy within the "free look" period of 15 days (30 days in case of electronic policies) from the date of receipt of policy document, by stating the reasons for the objection.

In a draft Insurance Regulatory and Development Authority of India (Protection of Policyholders' Interests and Allied Matters of Insurers) Regulations, 2024, Irdai proposed to consolidate several provisions of the different laws related to insurance.

On protection of interest of policyholders, the draft said, "The free-look period for the policies, obtained through any mode, shall be 30 days from the date of receipt of the policy document".

Further, no life insurance policy should be issued unless nomination is obtained, said the draft regulation of the Insurance Regulatory and Development Authority of India (Irdai).

"Nomination provisions relating to general, wherever applicable, and health insurance policies (have been) introduced," it said.

To enable electronic transfer of refund and for payments of claims, the draft said the insurer should collect details of bank accounts of insured at the proposal stage itself.

To promote ease of doing business, Irdai also proposed to dispense the requirement of filing of advertisement by insurers with the authority.

The draft further said an insurer having specified solvency ratio, profitability in three years out of five and having a satisfactory track record can now open a foreign branch.

The regulator has invited comments from stakeholders by March 4, 2024.

The draft follows recommendations of Regulations Review Committee (RRC) comprising members of insurance councils.