IRDA showed strictness on insurance companies, said - claims cannot be rejected in the absence of documents

On Tuesday, the Insurance Regulatory and Development Authority of India (IRDAI) issued a master circular that will usher in a new era for simple and customer-centric insurance. The circular, which also repeals 13 other circulars, states that general insurance companies cannot reject claims in the absence of documents.

IRDA said that it has now become possible to provide easy-to-understand insurance products to meet the individual needs of customers, give adequate options to customers, and improve their insurance experience.

The circular states that no claim will be rejected in the absence of documents. Necessary documents should be sought at the time of acceptance of the proposal. According to it, customers can be asked to submit only those documents that are necessary and related to claim settlement. Also, retail customers can cancel the policy at any time by informing the insurer, while the insurer can cancel the policy only on the grounds of proven fraud.

The insurance company should refund the proportionate premium for the remaining period on cancellation of the policy. IRDA has also set strict timelines for the settlement of claims, which include the appointment of surveyors and the submission of their reports. It will be the responsibility of the insurer to obtain the survey report on time.

It says that homeowners should have the option to choose additional covers like flood, cyclone, earthquake, landslide, rock slide, terrorism in the "fire" policy or opt out of the comprehensive fire and allied risks policy. Insurers will also have to provide a customer information sheet (CIS) to provide clear and concise policy details, including the scope of coverage, warranty, and claim settlement process.