Many rules related to insurance policies have been changed by the insurance regulator Insurance Regulatory and Development Authority (IRDA). This also includes the rules related to insurance policy refund. Under the new rule, insurance companies will have to disclose the rules and fees related to insurance policy surrender. The new rules will come into effect from April 1, 2024.
New rules related to policy surrender
According to the new rules, if the policy is returned or refunded within three years of purchase, the refund value is likely to be the same or even lower. It says that policies which are surrendered from the fourth to the seventh year may see a slight increase in their withdrawal value. Return value in insurance refers to the amount paid by insurance companies to the policyholder if he terminates the policy before its maturity date. If the policyholder ‘surrenders’ during the policy term, the earnings and savings portion is paid to him.
Unification of insurance rules
Let us tell you that in the meeting held by IRDA on March 19, many rules were changed. In this, 34 rules were integrated into six rules. At the same time, two new rules were brought. These rules cover aspects such as protection of policyholders’ interests, rural and social sector responsibilities, electronic insurance markets, insurance products and operation of overseas reinsurance branches as well as registration, assessment of insurance risks and premiums, finance, investment and company governance. Important areas are included.
Issuing these new rules, IRDAI said that the new insurance rules have been issued after interacting with other parties including industry people, experts and the public. Their objective is to enable insurance companies to respond quickly to market demand, improve ease of doing business and promote insurance.
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