Business Reporter
INSURANCE regulator IRDAI has notified
a host of regulations, including on surrender
charges wherein insurers have to
disclose such charges upfront.
IRDAI (InsuranceProducts) Regulations,
2024 merge six regulations into a unified
framework aimed at enabling insurers to
swiftly respond to evolving market
demands, enhancing the ease of conducting
business, and boosting insurance
penetration.
These regulations promote
good Governance in product
design and pricing, including
strengthening the principles governing
guaranteed surrender value & special surrender
value along with disclosures thereof,
IRDAI said in a statement.
It also ensures that the insurers adopt
sound management practices for effective
oversight and due diligence, it said.
These regulations, which will be effective
April 1, 2024, stipulate that the surrender valueise xpected to rema in the same
or even lower if policies are surrendered
within three years of the purchase.
For policies that have been surrendered
from the fourth to the seventh year, the
surrender value may see a minor increase,
it said. A surrender value in insurance
refers to the amount paid by the insurers
to the policyholder upon terminating the
policy before its maturity date. If the policy holder
surrenders during the policy
tenure, the earnings and savings portion
will be paid to him or her.
The Insurance Regulatory and
Development Authority of India (IRDAI)
at its meeting held on March 19 approved
eight principle-based consolidated regulations,
following the comprehensive
review of the regulatory framework for
the insurance sector.
These regulations encompass pivotal
domains such as safeguarding policyholders’
interests, rural and social sector
responsibilities, electronic insurance marketplace,
insurance products and operation
of foreign reinsurance branches, as
well as aspects of registration, actuarial,
finance, investment and corporate
Governance.