Irdai Proposes To Increase ‘Free Look’ Period to 30 Days

Mumbai: The Insurance regulator on Wednesday proposed to make nomination mandatory in life insurance policies. The Insurance Regulatory and Development Authority of India (IRDAI) introduced the amended draft regulations on the Protection of Policyholders’ Interests and Allied Matters of Insurers Regulations 2024. Under the proposed regulations, life insurance companies will not be able to issue a policy unless a nomination has been obtained. Similarly, the insurance regulator introduced nomination provisions in health and non-life policies.

“The free look period for the policies, obtained through any mode, shall be 30 days from the date of receipt of the policy document,” said the IRDAI. Currently, the free look period offered by most insurers is 15 days. A free look period is an opportunity provided by an insurer to the insured to return a policy if it does not meet his/her requirements.

In order to enable electronic transfer of refunds and for payment of claims, the insurer has to collect the details of bank accounts of the insured at the proposal stage.

In a major relaxation for insurers, the regulator also did away with the requirement of filing of advertisement with the Authority. Currently, advertisements can be launched only after prior approval from the regulator is obtained.

Insurers having specified solvency ratio, profitability in 3 years out of 5 years, and satisfactory track records can now open foreign branches including offices at the International Financial Services Centre Authority (IFSCA). Similarly, the returns specified for foreign branch offices have been dispensed with.

The regulator also proposed to do away with the existing requirement of reporting outsourcing but has asked insurers to make the necessary disclosures in their annual report.