More Flexibility For Insurance Policyholders, May Cancel Policy And Get Refund –IRDAI New Guidelines Explained | Personal Finance News

Announcing the Master Circular on 11 June 2024, IRDAI said that it will come into effect immediately. IRDAI said that the master circular shall apply to every single existing general insurance product and every add-on cover. It will also apply to the general insurance coverage section within a Package Product. The Master circular shall however not apply to health insurance  products included within a package produce.

Among the several points that have been mentioned in the circular, the most flexibility has been given on cancellation of insurance policy.

IRDAI says the following on policy cancellation in its 2024 Master Circular

1. IRDAI circular says that the retail policyholder can cancel the policy at any time during the term, by informing the insurer. In case the policyholder cancels the policy, he or she is not required to give reasons for cancellation.

2. The insurer can cancel the policy on the ground of established fraud, by giving minimum notice of 7 days to the retail policy holder.

3. Under no circumstances can the insurer cancel statutory Motor Third Party Liability insurance or any other compulsory insurance mandated by law except in case of double insurance or total loss

4. The insurer shall refund proportion of premium for unexpired policy period, if the term of the policy is upto one year and there is no claim(s) made during the policy period

5. The insurer shall refund premium for the unexpired policy period, in respect of policy with the term more than one year and the risk coverage for such policy years has not commenced.

The IRDAI Circular further added that no claim shall be rejected for want of documents. All the required documents shall be called at the time of underwriting the proposal. The customer may be asked to submit only those documents that are directly related to the claim settlement such as claim form, driving license, permit, fitness, FIR, un-traced report, fire brigade report, post mortem report, books of accounts, stock register, wage register, repair bills (only in cases where cashless is not available), wherever applicable.