Reg.1 Short title and commencement.--

       (1) These regulations may be called the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002.
       (2) They shall come into force on the date of their publication in the Official Gazette and shall apply to all contracts of insurance effected thereafter, except regulation 4(1) which shall come into force on 1st October, 2002.
       (3) These Regulations are in addition to any other regulations made by the Authority, which may, inter alia, provide for protection of the interest of policyholders.
       (4) These Regulations apply to all insurers, insurance agents, insurance intermediaries and policyholders.

Reg.2 Definitions.--

       (1) In these regulations, unless the context otherwise requires :
       (a) "Act" means the Insurance Act, 1938 (4 of 1938);
       (b) "Authority" means the Insurance Regulatory and Development Authority established under the provisions of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);
       (c) "Cover" means an insurance contract whether in the form of a policy or a cover note or a Certificate of Insurance or any other form prevalent in the industry to evidence the existence of an insurance contract;
       (d) "Proposal form" means a form to be filled in by the proposer for insurance, for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or d

Reg.3 Point of Sale.--

       (1) Notwithstanding anything mentioned in regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with-profits) or non-participating (without-profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case, the premium relatable to all the riders put together shall exceed 30% of the premium of the main product.
       Explanation : The rider or riders attached to a life policy shall bear the nature and character of the main policy, viz. participating or non-participating and accordingly the life insurer shall make provisions, etc., in its books.
    &n

Reg.4 Proposal for Insurance.--

       (1) Except in cases of a marine insurance cover, where current market practices do not insist on a written proposal form, in all cases, a proposal for grant of a cover, either for life business or for general business, must be evidenced by a written document. It is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form.
       (2) Forms and documents used in the grant of cover may/depending upon the circumstances of each case, be made available in languages recognised under the Constitution of India.
       (3) In filling the form of proposal, the prospect is to be guided by the provisions of section 45 of the Act. Any proposal form seeking information for grant of life cover may prominently state therein the requirements of section 45 of the Act.
  &nbs

Reg.5 Grievance redressal procedure.--

Every insurer shall have in place proper procedures and effective mechanism to address complaints and grievances of policyholders efficiently and with speed and the same along with the information in respect of Insurance Ombudsman shall be communicated to the policyholder along with the policy document and as may be found necessary.

Reg.6 Matters to be stated in life insurance policy.--

       A life insurance policy shall clearly state :
       (a) the name of the plan governing the policy, its terms and conditions;
       (b) whether it is participating in profits or not;
       (c) the basis of participation in profits such as cash bonus, deferred bonus, simple or compound reversionary bonus;
       (d) the benefits payable and the contingencies upon which these are payable and the other terms and conditions of the insurance contract;
       (e) the details of the riders attaching to the main policy;
       (f) the date of commencement of risk and the date of maturity or date(s) on which the benefits are payable;
       (g) the premiums payable, perio

Reg.7 Matters to be stated In general insurance policy.--

       (1) A general insurance policy shall clearly state:
       (a) the name(s) and address(es) of the insured and of any bank(s) or any other person having financial interest in the subject matter of insurance;
       (b) full description of the property or interest insured;
       (c) the location or locations of the property or interest insured under the policy and, where appropriate with respective insured values;
       (d) period of Insurance;
       (e) sums insured;
       (f) perils covered and not covered;
       (g) any franchise or deductible applicable;
       (h) premium payable and where the premium is provisional sub

Reg.8 Claims procedure in respect of a life insurance policy.--

       (1) A life insurance policy shall state the primary documents which are normally required to be submitted by a claimant in support of a claim,
       (2) A life insurance company, upon receiving a claim, shall process the claim without delay. Any queries or requirement of additional documents, to the extent possible, shall be raised all at once and not in a piecemeal manner, within a period of 15 days of the receipt of the claim.
       (3) A claim under a life policy shall be paid or be disputed giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required. However, where the circumstances of a claim warrant an investigation in the opinion of the insurance company, it shall initiate and complete such investigation at the earliest. Where in the opinion of the insurance company the circumsta

Reg.9 Claim procedure in respect of a general Insurance policy.--

       (1) An insured or the claimant shall give notice to the insurer of any loss arising under contract of insurance at the earliest or within such extended time as may be allowed by the insurer. On receipt of such a communication, a general insurer shall respond immediately and give clear indication to the insured on the procedures that he should follow. In cases where a surveyor has to be appointed for assessing a loss/claim, it shall be so done within 72 hours of the receipt of intimation from the insured.
       (2) Where the insured is unable to furnish all the particulars required by the surveyor or where the surveyor does not receive the full cooperation of the insured, the insurer or the surveyor as the case may be, shall inform in writing the insured about the delay that may result in the assessment of the claim. The surveyor shall be subjected to the code of conduct laid down by the

Legal Commentary on INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (PROTECTION OF POLICYHOLDERS INTERESTS) REGULATIONS, 2002 - Section 9

Introduction

Section 9 of the IRDA Regulations, 2002, primarily deals with the claim procedure under general insurance policies and emphasizes the insurer's obligation to inform the policyholder about payment delays and related penalties. It is part of the broader framework aimed at protecting policyholders' interests by ensuring transparency and timely settlement of claims.

What does Section Say

• Section 9 mandates that the insured or claimant must notify the insurer of any loss arising under the policy.
• It stipulates that if there is a delay in payment, the insurer shall pay interest at a rate 2% above the prevailing bank rate.
• The section also emphasizes the insurer's obligation to inform the policyholder if the amount paid is less than the due amount, especially in cases of unapproved or disputed payments.

Essential Ingredients

• Notice of Loss: The insured or claimant must give timely notice to the insurer regarding any loss.
• Interest on Delay: In case of delayed payment, interest at 2% above the bank rate must be paid.
• Disclosure of Payment Details: Insurers must inform policyholders about the payment details, especially if the amount paid is less than the due amount or if the payment is unapproved.
• Materiality and Transparency: The section underscores the importance of material information and transparency in claim settlement.

Scope of Section

• Applies to all general insurance policies covered under IRDA regulations.
• Covers the procedures for claim notification, settlement, and delayed payment interest.
• Encompasses insurers, policyholders, and claimants involved in general insurance claims.
• Ensures that policyholders are informed about the status of their claims and any discrepancies.

Punishment for Section

• While the section itself primarily mandates procedures and penalties related to delayed payments, the broader regulations empower IRDA to take disciplinary actions for breaches, including penalties and sanctions as per the IRDA Act and related regulations.
• Breaches such as non-compliance with the notification or payment obligations may lead to penalties, including fines up to Rs. 5,00,000 or other regulatory actions .

Legal Comments

• Claim Notification - The regulation emphasizes the obligation of the insured or claimant to notify the insurer of any loss promptly, ensuring timely processing of claims .
• Interest on Delay - The provision for interest at 2% above the bank rate incentivizes insurers to process claims promptly and penalizes delays .
• Transparency - Insurers are required to inform policyholders about the reasons for any unapproved or disputed payments, promoting transparency .
• Material Information - The regulation underscores the importance of materiality, requiring insurers to disclose all relevant information to policyholders .
• Protection of Policyholders - The section aligns with the broader objective of IRDA to protect policyholders' interests by ensuring fair and timely claim settlements .
• Regulatory Oversight - The IRDA has the authority to investigate breaches and impose penalties for non-compliance with claim procedures .
• Interest Rate Specification - The specific mention of interest at 2% above the bank rate provides a clear standard for delayed payments, reducing ambiguity .
• Scope of Application - The regulation applies universally to general insurance policies, ensuring consistency across the sector .
• Policyholder Awareness - The requirement for insurers to notify policyholders about payment discrepancies enhances awareness and reduces disputes .
• Legal Enforcement - The regulation provides a legal basis for policyholders to seek compensation and interest in case of delayed payments .
• Dispute Resolution - The procedures outlined facilitate dispute resolution by mandating clear communication and timely notification .
• Regulatory Power - IRDA’s power to enforce compliance and penalize breaches ensures adherence to the claim procedures .
• Complementary Regulations - Section 9 works in tandem with other regulations, such as those governing insurers and intermediaries, to ensure comprehensive protection .
• Materiality and Disclosures - The regulations require insurers to disclose all material facts related to claim payments, fostering transparency .
• Legal Certainty - Clear guidelines on claim procedures and penalties provide legal certainty to policyholders and insurers alike .

Note: The analysis is based on the available sources and references provided, emphasizing the key legal and procedural aspects of Section 9 of the IRDA Regulations, 2002.

Reg.10 Policyholders' Servicing.--

       (1) An insurer carrying on life or general business, as the case may be, shall at all times, respond within 10 days of the receipt of any communication from its policyholders in all matters, such as :
       (a) recording change of address;
       (b) noting a new nomination or change of nomination under a policy;
       (c) noting an assignment on the policy;
       (d) providing information on the current status of a policy indicating matters, such as, accrued bonus, surrender value and entitlement to a loan;
       (e) processing papers and disbursal of a loan on security of policy;
       (f) issuance of duplicate policy;
       (g) issuance of an endorsement

Reg.11 General.--

       (1) The requirements of disclosure of "material information" regarding a proposal or policy apply, under these regulations, both to the insurer and the insured.
       (2) The policyholder shall assist the insurer, if the latter so requires, in the prosecution of a proceeding or in the matter of recovery of claims which the insurer has against third parlies.
       (3) The policyholder shall furnish all information that is sought from him by the insurer and also any other information which the insurer considers as having a bearing on the risk to enable the latter to assess properly the risk sought to be covered by a policy.
       (4) Any breaches of the obligations cast on an insurer or insurance agent or insurance intermediary in terms of these regulations may enable the Authority to initiate action against each