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IRDA Bill on policy-holder protection seen by June

Debjoy Sengupta

The Insurance Regulatory and Development Authority will announce its final Bill on the protection of policy holders' interest by end-June.

Confirming this, IRDA member, Harbhajan Singh said the Bill will provide an alternative to addressing consumer grievances through courts, thus saving the insurer and insured of legal hassles.

Meanwhile, the agents draft commission is ready and is awaiting minor changes from the Centre. The final Bill on brokerage has already been passed to the finance ministry and is awaiting approval.

The consumer protection Bill will be equally applicable for both the public and private insurance companies alike. The scope of the Bill will range from claim assessment and settlement to premium payment and collection.

The guidelines will also act as an alternative to the insurance ombudsman department that was set up to address consumer grievances.

Sources from the industry say the norms will be drawn extensively from the UK where insurance has undergone sea changes last year.

The authority is also working on setting up benchmarks for insurers for the issue of policy document and claims settlement by firms. Claim settlement in India has always been a painful process particularly in the pre-liberalisation era.

Most of the customer grievances has been and continues to be in this area.

To facilitate implementation of guidelines, Irda is also planning to set up committees for handling consumer grievances and protection of policyholder's interests.

Committees will be set up at the regional, zonal as well as at the board level.

While, the regional and zonal level committees will comprise executives from insurance companies, board-level committees will comprise people such as retired high court judges.

Although state-run players have some kind of complaint redressal committee in place, the new players are awaiting guidelines from the authority.

Advertising norms for all players in the sector is expected to see major changes soon, policy forms is also expected to be made free from jargons and disclosures.

According to the new guidelines, insurers will also be required to issue renewal notices to the policy-holders.

This would ensure that a policy-holder is not duped after the payment of the policy premium.

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