The Insurance Regulatory and Development Authority of India (Irdai) is involved in bringing out an array of reforms in the insurance sector to bring it in tune with the Insurance Laws (Amendment) Act that has been passed by Parliament.
In fact, till June-end alone, the regulator is expected to bring about more than half a dozen reforms that will have a significant impact on the customer.
Business Standard takes you through the reforms and their impact on the policyholder
Bancassurance
Banks till now were acting as corporate agents for only one life, one non-life and one standalone health insurer
From now on, they would have to tie up with more than one insurer in each segment
For customers, this would mean each bank branch will no longer be pushing one insurer's product
They will have many more policies to choose from and the bank will be liable for each product sold
Common service centres
In rural areas, small micro-offices of insurers were the only avenue to buy insurance, apart from bank branches
Now, common service centre (CSCs) will be empowered to sell insurance to people
Simple and easy-to-understand insurance products will be sold across 100,000 plus CSCs across the country
Renewals and claims will also be handled here
Agent remuneration
A significant portion of first-year premiums goes towards paying agent commissions
Irdai is expected to bring out regulations to ensure commissions are not concentrated only on first year
First-year premiums might come down for policyholders due to a more spread out commission structure
Greater thrust on yearly renewals will be put by respective agents, to ensure policies don't lapse
Electronic insurance
The new insurance Act has talked about insurance repositories that will offer electronic insurance
More policies expected to be digitised, which is free of cost to customers
No fear of claim rejection due to loss of policy documents once it is digitised
No additional KYC requirements since e-Insurance Account will hold all details
Claims rejection
According to the new insurance Act, no insurance claim can be rejected after three years of completion of policy
Insurers will be more stringent at the time of issuance of policy
A policyholder's claim cannot be questioned on any ground
Since fraudulent gangs operate to get fake claims cleared, too many such instances may increase risk of premium rise in particular segments, or absence of smaller ticket products
