Game Changer for Policyholders: 30 Days to Say Yes or No: IRDAI Extends Policy “Free Look” Period

The Insurance Regulatory and Development Authority of India (IRDAI) is proposing significant changes to insurance regulations, as outlined in the draft Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024. The key proposals include extending the “free look” period for policy returns to 30 days, making nomination mandatory for life policies, and introducing consolidated provisions for various insurance laws.

Under the new regulations, policyholders will have a 30-day “free look” period to review and return policies. Additionally, the draft mandates that no life insurance policy should be issued without obtaining a nomination. The proposed changes also extend to general and health insurance policies.

To streamline processes, the draft suggests insurers collect bank account details at the proposal stage for electronic transfers of refunds and claims payments. Furthermore, IRDAI aims to promote ease of business by eliminating the requirement for insurers to file advertisements with the authority.

The draft introduces the concept of an online insurance marketplace called “Bima Sugam,” designed to enhance the availability, accessibility, and affordability of insurance products. Bima Sugam is envisioned as a one-stop solution for all insurance stakeholders, fostering transparency, efficiency, and collaboration across the insurance value chain. The marketplace, proposed as a not-for-profit company, is expected to contribute to the vision of ‘Insurance for all by 2047.’ IRDAI has invited comments on the draft regulations until March 4.