Key Provisions of the Master Circular

The Master Circular mandates several important changes for both life and general insurance sectors:

1. One of the central provisions requires insurers to provide essential summaries of policy information at multiple stages of the insurance contract. This includes:
   • Pre-Sale Stage: Prospective policyholders must receive clear guidance about the policy features and terms before the sale.
   • Proposal Stage: Insurers must provide detailed information during the proposal process.
   • Policy Receipt: Upon receipt of the policy documents, a summary of key features, benefits, and exclusions must be provided.
   • During the Policy Term: Regular updates about policy terms and conditions are required.
   • At Claim Time: Clear instructions and information must be provided when a claim is made.
2. Central to this directive is the Customer Information Sheet (CIS), which must outline:
   • Type of Insurance: Whether it is term life, whole life, or another type of coverage.
   • Sum Assured: The amount payable to the beneficiary in case of a claim.
   • Benefits: Detailed explanation of the coverage provided by the policy.
   • Exclusions: List of events or situations not covered by the policy.
   • Important Details: Information about the free look period, policy renewal date, options for policy revival and loans, and other relevant details.
   • Claims Procedure: Instructions on how to file a claim.
   • Policy Servicing: Information on customer support and assistance.
   • Grievance Redressal: Details on how to file a complaint and contact information for the Insurance Ombudsman.
3. The CIS and proposal forms must be available in regional languages upon request, ensuring that policyholders fully understand their policies in a language they are comfortable with.
4. 30-Day Free Look Period: The circular introduces a 30-day free look period for both Life and Health insurance policies. During this time, policyholders can review the policy terms and conditions and cancel the policy if dissatisfied. No premium deposit is required with the proposal form, except for policies where risk cover begins immediately upon receipt of the premium.
5. Proposal Form and Nominee Details: Insurers are required to collect nominee details, including bank account information, at the proposal stage. This facilitates prompt claim settlements in the event of the policyholder's death. The proposal form must be submitted without requiring an initial premium deposit, except in specific cases where immediate risk cover applies.
6. Search Tool and IT Integration: Insurers must provide a search tool on their websites to verify authorized distribution channels. Additionally, insurers are directed to integrate their IT systems with Digilocker, enhancing policyholders' access to important documents.
7. Turnaround Times and Unclaimed Amounts: The circular specifies turnaround times for policy processing and claims settlements. Policyholders can now search for unclaimed amounts on the Bima Bharosa website managed by IRDAI, providing a centralized platform for tracking any unclaimed insurance funds.