Regularizing frame work of Insurance and Insurance Companies
PG Ref: DEAID/E/2015/00466
Received by Insurance Division
Forward to for further action: Insurance Regulatory & Development Authority
Insurance companies rules and regulation is really not correct
Claim settlement amount is not up to the mark
General Public cheated by Insurance companies and at the last no public benefit to the general public due to poor frame work and minimum amount payment.
Every places they have mention all things in there favor
IRDA have big responsibility to save consumer rights.
Big Role need to be play by IRDA Insurance Regulatory and Development Authority of India in creating Minimum claim and regularizing terms and condition.
Request to +pmoindia to support Indian citizen and develop culture of service oriented mind set.
No more cheating in Insurance
poor claim amount due to poor regulation in India
same kind of issue with other insurance companies too.
Poor Compensation and real level terms and condition for claim amount & waiting time terms deductible terms regularizing framework required by IRDA
really big flaws in polices
1. The Draft of IRDA (Protection of Policyholders Interest) Regulations, 2014
2. Important Point added in draft policy
ANNEXURE – IV ENFORCEMENT OF RIGHTS OF CONSUMERS For the purposes of this Annexure, “insurance service provider” means Insurers, insurance agents and insurance intermediaries and “insurance advisor” means an insurance service provider or its authorized representative who is eligible to solicit insurance under the extant regulatory framework. The insurance service providers and Insurance advisors shall secure the following Rights to Consumers: 1) Right To Professional Diligence a) “Professional diligence” means the standard of skill and care that an insurance service provider would be reasonably expected to exercise towards a consumer, commensurate with– i. Honest market practice; ii. The principle of good faith; iii. The level of knowledge, experience and expertise of the consumer; iv. The nature and degree of risk embodied in the insurance product or service being availed by the consumer; and v. The extent of dependence of the consumer on the insurance service provider b) Every insurance service provider shall ensure that any interaction that they have with consumers shall be carried out in good faith and in line with honest market practices. Every insurance service provider shall exercise professional diligence as explained above in their dealing with prospects and policyholders. 2) Right To Protection Against Unfair Contract Terms a) A contract term which is not contained in the insurance product documents approved by IRDA under the File and Use Guidelines relevant to the insurance product issued by IRDA from time to time shall be deemed to be an ‘unfair term’. Such an unfair term is void ab initio. b) Subject to (a) above, an unfair term in a non-negotiated insurance contract will be void. c) A term is unfair if it i. causes a significant imbalance in the rights and obligations of the parties under the insurance contract, to the detriment of the consumer; and ii. is not reasonably necessary to protect the legitimate interests of the insurance service provider. d) The factors to be taken into account while determining whether a term is unfair include i. the nature of the insurance product or service dealt with under the insurance contract; ii. the extent of transparency of the term; iii. the extent to which the term allows a consumer to compare it with other contracts for similar products or services; and iv. the contract as a whole and the terms of any other contract on which it is dependent. e) IRDA, from time to time, would give illustrative list of terms which are considered unfair. f) A term is transparent if it i. is expressed in reasonably plain language that is likely to be understood by the consumer; 11 ii. is legible and presented clearly; and iii. is readily available to the consumer affected by the term g) A non-negotiated contract means a contract whose terms are not negotiated between the parties to the contract and includes i. A contract in which, relative to the consumer, the insurance service provider has a substantially greater bargaining power in determining the terms of the contact; and ii. A standard form contract. i.e. a contract that is substantially non-negotiable for the consumer, except for the terms contained in item h below h) Even if some terms of an insurance contract are negotiated in form, the insurance contract may be regarded as non-negotiated contract if so indicated by – i. An overall and substantial assessment of the contract and ii. The substantial circumstances surrounding the contract i) In a claim that an insurance contract is a non-negotiated contract, the onus of demonstrating otherwise shall be on the insurance service provider. j) If a term of contract is determined to be unfair, the parties will continue to be bound by the remaining terms of the insurance contract to the extent that the insurance contract is capable of enforcement without the unfair term. k) The protection against unfair contract terms contained above does not apply to a term of an insurance contract if it — i. defines the subject matter of the contract; ii. sets the price that is paid, or payable, for the provision of the insurance product or service under the contract and has been clearly disclosed to the consumer Provided the term does not deal with payment of an amount which is contingent on the occurrence or non-occurrence of any particular event; or iii. is required, or expressly permitted, under any law or regulations 3) Right to Protection Against Unfair Market Conduct a) Unfair conduct in relation to insurance product or service is prohibited. b) Unfair conduct means an act or omission by an insurance service provider or its financial representative that significantly impairs, or is likely to significantly impair, the ability of a consumer to make an informed transactional decision and includes i. Misleading conduct; ii. Abusive conduct; and iii. Such other conduct as may be specified. c) Misleading conduct - Conduct of an insurance service provider or its financial representative in relation to a determinative factor is misleading if it is likely to cause the consumer to take a transactional decision that the consumer would not have taken otherwise, and the conduct involves i. Providing the consumer with inaccurate information or information that the insurance service provider or financial representative does not believe to be true; or ii. Providing accurate information to the consumer in a manner that it is deceptive. Explanation: In determining whether a conduct is misleading, the following factors must be considered to be "determinative factors" — · the main characteristics of the insurance product or service, including its features, benefits and risks to the consumer; · the consumer's need for a particular insurance product or service or its suitability for the 12 consumer; · the consideration to be paid for the insurance product or service or the manner in which the consideration is calculated; · the existence, exclusion or effect of any term in an insurance contract, which is material term in the context of that financial contract; · the nature, attributes and rights of the insurance service provider, including its identity regulatory status and affiliations; and · the rights of the consumer under any law or regulations. d) Abusive conduct: Conduct of an insurance service provider or its financial representative in relation to an insurance product or service is abusive if it – i. involves the use of coercion or undue influence; and ii. causes or is likely to cause the consumer to take a transactional decision that the consumer would not have taken otherwise. Explanation: In determining whether a conduct uses coercion or undue influence, the following must be considered — · the timing, location, nature or persistence of the conduct; · the use of threatening or abusive language or behaviour; · the exploitation of any particular misfortune or circumstance of the consumer, of which the insurance service provider is aware, to influence the consumer's decision with regard to the insurance product or service; · any non-contractual barriers imposed by the insurance service provider where the consumer wishes to exercise rights under a contract; and · a threat to take any action, depending on the circumstances in which the threat is made. e) Protection From Conflict of Interest of Advisors: To ensure that the interests of consumers take precedence over that of financial service provider 4) Right To Protection of Personal Information a) ‘Personal information’ means any information that relates to a consumer or allows a consumer’s identity to be inferred, directly or indirectly, and includes – i. name and contact information; ii. biometric information, in case of individuals; iii. information relating to transactions in or holdings of financial products iv. information relating to use of insurance products and services v. such other information as may be specified like information relating to personal health, income, assets etc. b) An insurance service provider must — i. not collect personal information relating to a consumer in excess of what is required for the provision of a insurance product or service; ii. maintain the confidentiality of personal information relating to consumers and not disclose it to a third party, except in a manner expressly permitted herein. iii. make best efforts to ensure that any personal information relating to a consumer that it holds is accurate, up to date and complete; iv. ensure that consumers can obtain reasonable access to their personal information, subject to any exceptions that may be specified by IRDA; and 13 v. allow consumers an effective opportunity to seek modifications to their personal information to ensure that the personal information held by the insurance service provider is accurate, up to date and complete. c) An insurance service provider may disclose personal information relating to a consumer to a third party only if — i. it has obtained prior written informed consent of the consumer for the disclosure, after giving the consumer an effective opportunity to refuse consent; ii. the consumer has directed the disclosure to be made; iii. the disclosure is directly related to the provision of the insurance product or service to the consumer, if the insurance service provider — · informs the consumer in advance that the personal information may be shared with a third party; and · makes arrangements to ensure that the third party maintains the confidentiality of the personal information in the same manner as required herein; iv. the disclosure is made to protect against or prevent actual or potential fraud, unauthorised transactions or claims, if the insurance service provider arranges with the third party to maintain the confidentiality of the personal information in the manner required herein; v. IRDA has approved or ordered the disclosure, and unless prohibited by the relevant law or regulations, the consumer is given an opportunity to represent under such law or regulations against such disclosure; or vi. the disclosure is required under any law or regulations, and unless prohibited by such law or regulations, the consumer is given an opportunity to represent under such law or regulations against such disclosure; d) For the purposes of this provision, ‘third party" means any person other than the concerned insurance service provider, including a person belonging to the same group as the insurance service provider. 5) Right To Requirement of Fair Disclosure a) An insurance service provider must ensure fair disclosure of information that is likely to be required by a consumer to make an informed transactional decision. b) In order to constitute fair disclosure, the information must be provided — i. sufficiently before the consumer enters into an insurance contract, so as to allow the consumer reasonable time to understand the information; ii. in writing and in a manner that is likely to be understood by a consumer belonging to a particular category; and iii. in a manner that enables the consumer to make reasonable comparison of the insurance product or service with other similar products or services. c) IRDA may specify the types of information that must be disclosed to a consumer in relation to an insurance product or service, which may include information regarding — i. main characteristics of the product or service, including its features, benefits and risks to the consumer; ii. consideration to be paid for the product or service or the manner in which the consideration is calculated; iii. existence, exclusion or effect of any term in the insurance product or financial contract; 14 iv. nature, attributes and rights of the insurance service provider, including its identity regulatory status and affiliations; v. contact details of the insurance service provider and the methods of communication to be used between the insurance service provider and the consumer; vi. rights of the consumer to rescind an insurance contract within a specified period; or vii. rights of the consumer under any law or regulations. d) An insurance service provider must provide a consumer who is availing an insurance product or service provided by it, with the following continuing disclosures — i. any material change to the information that was required to be disclosed at the time when the consumer initially availed the insurance product or service; ii. information relating to the status or performance of an insurance product held by the consumer, as may be required to assess the rights or interests in the insurance product or service; and iii. any other information that may be specified. e) A continuing disclosure must be made — i. within a reasonable time-period from the occurrence of any material change or at reasonable periodic intervals, as applicable; and ii. in writing and in a manner that is likely to be understood by a consumer belonging to that category. f) IRDA may specify— i. the nature of information that must be disclosed on a continuing basis to a consumer who has availed of a specified insurance product or service; ii. the time-period within which continuing disclosures of information are to be made for a specified insurance product or service; iii. circumstances in which the consumer will have a right to terminate the insurance contract upon a continuing disclosure being made; 6) Right To Receive Suitable Advice a) Every insurance advisor must i. make all efforts to obtain correct and adequate information about the relevant personal circumstances of a consumer; and ii. ensure that the advice given is suitable for the consumer after due consideration of the relevant personal circumstances of the consumer. b) IRDA would take into account the following factors in relation to (a) above — i. the extent to which the cost of seeking information about the relevant personal circumstances of consumers might restrict the access of consumers to the insurance product or service; and ii. sufficiency of the disclosures made under 5 above to allow consumers to assess the suitability of the insurance product or service for their purposes. c) If it is reasonably apparent to the insurance advisor that the available information regarding the relevant personal circumstances of a consumer is incomplete or inaccurate, the insurance advisor must warn the consumer of the consequences of proceeding on the basis of incomplete or inaccurate information. d) If a consumer intends to avail of an insurance product or service that the insurance advisor determines unsuitable for the consumer, the insurance advisor — i. must clearly communicate its advice to the consumer in writing and in a manner that is likely to be understood by the consumer; and 15 ii. may provide the insurance product or service requested by the consumer only after complying with clause (i) and obtaining a written acknowledgement from the consumer. e) IRDA may categorize certain consumers or class of consumers as retail consumers and specify the insurance products or services which may be provided to retail consumers or a class of retail consumers. f) IRDA may specify — i. the type of enquiries that need to be made to determine the relevant personal circumstances of retail consumer for an insurance product or service; or ii. that certain types of communications issued by an insurance service provider to a retail consumer would not constitute advice. 7) Protection From Conflict of Interest of Advisors a) An insurance advisor musti. provide a consumer with information regarding any conflict of interests, including any conflicted remuneration that the insurance advisor has received or expects to receive for making the advice to the consumer. This information shall be given to the consumer in writing and in a manner that is likely to be understood by the consumer and a written acknowledgement of the receipt of the information should be obtained from the consumer. ii. give priority to the interests of the consumer if the insurance advisor knows, or reasonably ought to know, of a conflict between — · its own interests and the interests of the consumer; or · the interests of the concerned insurance service provider and interests of the consumer in cases where the advisor is a representative of the insurance service provider. b) IRDA may specify i. the circumstances in which a benefit received by an insurance advisor would or would not be considered to be a conflicted remuneration; or ii. the nature, type and structure of benefits permitted to be received by an insurance advisor for an insurance product or service. c) "Conflicted remuneration" means any benefit, whether monetary or non-monetary, derived by an insurance advisor from persons other than consumers that could, under the circumstances, reasonably be expected to influence the advice given by the insurance advisor to a consumer.