HYDERABAD: Soon, insurance policy holders may not have to cough up fee to effect changes in nomination or to register cancellations, as per sector watchdog IRDA.
The regulator also proposed zero registration fee for a nomination and furnishing a written acknowledgement.
These are part of IRDA’s draft on ‘Fee for Registering Cancellation or Change of Nomination by the Holder of a Policy of Life Insurance.” Stakeholders can send recommendations to the regulator by February, 2.
Currently, insurers have to give a written acknowledgement about registering a nomination or a cancellation or change thereof and are allowed to charge fee for registering such cancellation or change.
“...it may be observed that the holder of a policy of life insurance has a right for effecting a nomination and for registering such nomination for the first time be it at the time of effecting the policy of life insurance or at a later time, no fee shall be charged by the life insurers,” it said.
According to IRDA, registration charges or cancellation of nomination may vary for policies kept in electronic format and there is need to treat these kind of policies differently in terms of levy of fee. “...registering the nomination or cancellation or change of nomination shall be regarded as important policy holder services.
“As such nomination helps even the life insurers to seamlessly discharge their liability in the event of happening of the contingent event covered under a policy of life insurance,” it said.
Meanwhile, the draft has also proposed to fix the upper limit of fee allowed to be collected by life insurers subject to which life insurers will have the flexibility to decide in levying any lower amount.
Similarly, on the cost-benefit front, IRDA said there were no significant financial implications on insurers for effecting such changes.