NEW DELHI: General insurance companies can now offer insurance policies for a tenure of less than a year, and they cannot reject claims for want of documents, according to a circular issued by the insurance regulator – Insurance Regulatory and Development Authority of India (IRDAI) -- on Tuesday.
The circular is part of larger insurance sector reforms – one of the key agendas of the new government’s 100-day plan. According to the master circular, customers can be offered insurance policies which are less than one year, annual and more than one year. Most general insurance policies – motor, fire, house, travel, etc – come with the tenure of a year or more.
The circular says that no claim can be rejected for want of documents, and that all required documents should be called at the time of underwriting the proposal. The customer may be asked to submit only those documents that are directly related to the claim settlement.
The new rules enumerated in the circular are customer-centric, and protects the rights of customers. For example, the circular says retail customers can cancel the policy anytime by informing the insurer, but the insurer can cancel the policy only on grounds of established fraud.
The insurer will have to refund proportionate premium for the unexpired policy period on cancellation. The circular prescribes strict timelines for settlement of claims including turnaround time for appointment of surveyors and submission of their reports.