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ICICI Lombard Expert Blog
 

New Circular of IRDAI Eases Communication Concerns for Policyholders

May 16 2019
Insurance

The new circular will help policyholders get reminders on policy renewals

The Insurance Regulatory and Development Authority of India (IRDAI) has issued a circular putting specific guidelines in place for insurers regarding communication with policyholders during the entire tenure of the policy.

As per the circular, insurers need to collect phone number and email id of the policyholder and update them regularly.

Insurers have been asked to put a mechanism in place whereby policyholders can update their contact details electronically, both through mobile app and website.

However, the decision to provide this information remains voluntary for the policyholder. It must be noted that due to wrong contact details, several policyholders fail to receive renewal reminders regarding their policies on time leading to policy lapsation.

Today, on websites of life and general insurance companies, more often than not, there’s no way for policyholders to update their contact details. However, the new circular makes it a regulatory expectation for insurers to collect contact information of the insured.

The circular also makes it clear that in case the insurer fails to collect contact information of policyholders, it must explain the regulator about the attempts made by it to do so. Experts feel that it will lead to tightening of systems for insurers, which might push up renewal rates. However, this will have a positive impact on other areas including policy proposal.

Under the new regulations, insurers need to constantly provide update to policyholders about the processing status of their application. This will be particularly useful if there’s a medical test or physical inspection.

Another area which can benefit from the move is the awareness related to the right of policyholders. Insurers also need to send periodic messages to policyholders and caution them regarding fraudulent calls.

Also, before sending any message related to services offered, the insurer needs to seek consumers’ consent.

*Source:Money Control

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