IRDAI Takes Measures to Ensure Clarity and Simplify Insurance Policies through CIS
The Insurance Regulatory and Development Authority of India (IRDAI) has recently issued a circular on October 30th, instructing insurers to provide a revised version of the Customer Information Sheet (CIS). This initiative aims to enable policyholders to easily understand the fundamental aspects of their policies.
Providing Clarity to Policyholders
To bridge the information gap between insurers and policyholders, the IRDAI has mandated that all insurers, including life and health insurance providers, must distribute the updated CIS to their policyholders. The current CIS has been found to be lacking in terms of conveying policy information in a clear and comprehensible manner.
Addressing Asymmetry of Information
The decision to revise the CIS comes after the regulator received numerous complaints about the imbalance of information between insurers and policyholders. This initiative aims to rectify the situation and ensure that policyholders have access to all relevant details regarding their policies.
Web Accessibility and Confirmation
Insurers will also be required to provide a web link where policyholders can access product-related documents, including the customer information sheet. Additionally, insurers must obtain confirmation from policyholders regarding the receipt and understanding of the CIS.
Mandatory Details Covered in the Revised CIS
The revised CIS will include the following mandatory details:
1. Name of Insurance Policy
The specific name of the insurance policy purchased by the policyholder.
2. Policy Number
The unique identification number assigned to the policy.
3. Type of Policy
Indicating whether the policy is indemnity-based, benefit-based, or a combination of both.
4. Sum Insured
Clearly specifying the individual sum insured and floater sum insured, if applicable.
5. Policy Coverage
A comprehensive description of what the policy covers in terms of benefits and services.
6. Exclusions
An exhaustive list of all exclusions that are applicable to the policy.
7. Waiting Period
Details about the initial waiting period, specific waiting periods, and coverage of pre-existing diseases.
8. Financial Limits of Coverage
Information regarding the financial limits of coverage provided by the policy.
9. Claims/Claims Procedure
Guidance on the procedure to be followed for both cashless service and reimbursement claims, including pre and post hospitalization requirements.
10. Policy Servicing
Including the contact number of the insurer’s call center for policy-related queries and services.
11. Grievances/Complaints
Providing the details of the grievance redressal officer for policyholders to address any complaints or issues.
12. Things to Remember
This section will entail important details such as the process for free look cancellation, policy renewal, migration, changes in the sum assured, and the moratorium period.
13. Policyholder Obligations
Clear explanations of the policyholder’s responsibilities, including disclosures of pre-existing diseases and other relevant information.
Implementation and Future Compliance
The revised format of the Customer Information Sheet will come into effect from January 1, 2024. Insurers must ensure full compliance with the revised CIS guidelines and provide the necessary information to policyholders in a clear and understandable manner.
Benefits for Policyholders
The implementation of the revised CIS format aims to empower policyholders with better understanding and knowledge of their insurance policies. By providing transparent and concise information, it is expected to reduce disputes, minimize delays, and enhance the overall experience of policyholders. Policyholders will have a clearer picture of their rights, obligations, and coverage, thereby enabling them to make well-informed decisions.
Policyholder Responsibility
Policyholders are urged to fulfill their part of the responsibility by transparently and honestly disclosing any relevant material information related to their health. Failure to provide accurate and complete information may have consequences during claim settlements. Therefore, policyholders are advised to disclose all necessary details to ensure a smooth and hassle-free claims process.
In conclusion, the IRDAI’s directive to insurers to provide a revised Customer Information Sheet (CIS) represents a significant step towards enhancing clarity and transparency in insurance policies. By providing policyholders with comprehensive and easily understandable information, insurers aim to empower and educate customers. This initiative not only benefits policyholders but also promotes fairness and accountability in the insurance industry.
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