Insurers to provide details of basic features to customers from Jan 1, 2024

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Insurance companies will have to provide basic features of a policy like sum assured, what the policy covers as well as exclusions, and claim procedure, to policyholders in a prescribed format from January 1, for easy understanding of terms and conditions.

The Insurance Regulatory and Development Authority of India (Irdai) has revised the existing customer information sheet so as to convey basic information about the policy purchased in a manner that is easily understood.

"The revised customer information sheet (CIS) shall be implemented with effect from January 1, 2024," the regulators said in a circular to all insurance companies.

Irdai said that it is important for a policyholder to understand the terms and conditions of the policy that has been purchased.

"Since a policy document may be fraught with legalese, it is imperative to have a document that explains in simple words, the basic features with regards to the policy and provides necessary information," the circular said.

It also noted that several complaints are still emanating as a result of asymmetry of information between insurer and the policy holder, Irdai said, while providing rationale for introducing revised CIS.

As per the revised CIS, insurers will have to provide 'name of insurance product/policy'; 'policy number', 'type of insurance product/policy'; and 'sum insured'.

Policyholders will also be informed about policy coverage (like hospital expenses), exclusions (what the policy does not cover), waiting period, financial limits of coverage, claims procedure, and details about grievances/complaints redressal mechanism.

The circular further said that insurers, intermediaries, and agents will forward the CIC to all policyholders, and also obtain an acknowledgement regarding the same.

Also, CIC should be made available in local language if the policyholder so desires.