Life, Health and Motor Insurance Rules Changes 2020: Amid Covid-19 pandemic, the year 2020 witnessed several customer-friendly announcements by the Insurance Regulatory Development Authority of India (IRDAI).
With the pandemic wreaking havoc, the need of COVID specific coverage was needed to provide customers with some semblance of financial relief. Representational image
Amid Covid-19 pandemic, the year 2020 witnessed several customer-friendly announcements by the Insurance Regulatory Development Authority of India (IRDAI). The regulator put the customers first, announcing policies and regulations in their favour. There were several initiatives in the insurance segment which directly impacted policyholders, both present and future, in the most positive ways. Take a look:
The ‘Sandbox’ initiative
In order to promote modern innovations in insurance products, keeping in mind the evolving requirements of customers, the Regulator introduced the ‘Sandbox’ project. Under this initiative, insurance companies can launch pilot products with innovative coverage benefits. If the idea floated finds customers and becomes popular, insurers can then launch full-fledged products with such innovative features, Dhirendra Mahyavanshi, Co-Founder, Turtlemint ( An InsurTech Company), told FE Online.
“The ’Sandbox’ initiative helps insurers experiment with innovative ideas on a pilot basis without incurring considerable financial costs,” he added.
Health Insurance Initiatives
Launch of COVID specific health plans
With the pandemic wreaking havoc, the need of COVID specific coverage was needed to provide customers with some semblance of financial relief. “The Regulator directed insurers to launch Corona Kavach (indemnity coverage) and Corona Rakshak (fixed benefit plan). Both these policies are short-term COVID specific plans that provide immediate coverage against COVID at affordable premiums and without deductibles,” said Mahyavanshi.
Easing of the claim settlement process
In order to make health insurance claims easier during the pandemic, the Regulator guided insurance companies to expedite their claim settlement process. The Regulator also stated that no claim should be rejected by insurers without considerable cause and without serious reasons.
The IRDAI has made health insurance plans more comprehensive with the introduction of wellness benefits. According to Mahyavanshi, the inclusion of wellness benefits is expected to have a three-pronged effect – 1. It would reward policyholders for adopting a healthy lifestyle 2. It would promote healthy living 3. It would reduce the claim experience of insurers thereby increasing their revenue
Life Insurance Initiatives
Standardized term insurance plan
From 1stst January 2021, the life insurance market would see the launch of a standardized term plan called the Saral Jeevan Bima.
The Saral Jeevan Beema would provide a standardized term insurance cover. The Turtlemint co-founder said this policy would simplify the concept of term insurance. “Currently, the term insurance plans offered in the market have evolved into comprehensive plans that offer a multitude of coverage options and benefits thereby confusing a layman. With standardized coverage, individuals can opt for a simple cover at affordable rates,” he said.
The Regulator has asked insurers to offer online KYC facilities to their customers.
Now, customers can verify their details online through OTPs, digital signatures or personalized verification links sent to their email IDs. Online KYC is convenient and eliminates the need for physical signatures which, during the pandemic, can be threatening.
Motor Insurance initiatives
Withdrawal of long term comprehensive plans
The IRDAI has withdrawn the long term own damage cover to avoid miss-selling, higher premium outgoes and ambiguity in no claim bonus. Now, new vehicles are required to purchase a long-term third party cover while their own damage cover would be offered only on an annual basis. These initiatives are expected to make insurance plans popular among consumers, make plans relevant to evolving needs and preferences, and also increase the penetration of insurance in India.