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The Policy holders are the main stakeholders in the Insurance companies. It will, rather, not be unfair to address them as Insurer’s Capital.  Hence, prime importance needs to be given for protection of policy holders’ interest. The IRDAI, being the regulator for Insurance sector, also thought it expedient to frame the regulations in this regard. Accordingly, the first set thereof was brought in force w.e.f 1^st October, 2002 in the shape of “Protection of Policy Holders Interest Regulations, 2002 .

Thereafter, with the advent of new marketing technologies and development of new Insurance products, various unfair practices, jeopardizing the customers’ interest were noticed especially in case of Motor add-on covers and Health insurances which prompted the IRDAI to replace the Regulations of 2002 by a fresh set of regulations with wide objectives.

Accordingly, the new Regulations known as ‘The IRDAI (Protection of policy holders interest) regulations, 2017 were framed and notified in the Gazette of India dt.22th June, 2017.

As mentioned above, the 2017 regulations  framed with vide objectives , are more elaborative, clear and stringent, as is evident from the salient features thereof, given hereunder–

1. These Regulations are applicable to all insurers, distribution channels, intermediaries, insurance intermediaries, other regulated entities and policy holders to ensure the protection of  policy holders interest
2. The regulations also prescribed that all the Insurers, distribution channels and intermediaries including all regulated entities fulfill  their obligation towards the policy holders, and                                                                                                       
3. To have in place a standard procedures and best practice in sale and service of insurance policies to ensure policy holders centric governance with emphasis on their grievance redressal.
4. All insurers are required to frame a Policy, with minimum disclosure requirement; for protection of policy holder’s interest, duly approved by their Board and this has to be confirmed to IRDAI by each insurer.
5. The insurers are also required to display on their web site, the Board approved service parameters and TAT .
6. The proper recognition has been given to Health Segment and separate regulations to protect ‘Health Insurance policy holder’s interests’ are in place.
7. The 2017 regulations have broaden its ambit to cover other regulated entities and distribution channels including point of sale persons whereas 2002 regulations were applicable to the Agents, insurance intermediaries and policy holders only.
8. The insurers have to clearly define the Scope of the policy, the Terms and conditions for claims, Exclusions under (a) Standard, (b) Policy specific (c)  Those which cannot be waived and (d) Those can be waived by charging extra premium; has to be clearly worded and explained in simple and understandable language.
9. The distributors also to disclose to customers all the material information about policy.
10. It is, accordingly, now made mandatory on the part of insurer to obtain a certificate from the policy holder that the proposal form and the policy have been fully explained to him and that he understands the policy.
11. The premium for critical illness rider in Health policy shall not exceed 100% of basic premium.
12. The timeline for Surveys and investigation in claims is further tightened. In case of deviation from time line the surveyor has to keep the insured and insurer informed of the reasons /progress thereof, as the case may be.
13. Claims against Health policies are to be settled within 30 days from the date of receipt of the last necessary document. The 30 days time can be extended to max.45 days in case the investigation is required.
14. The surveyor has to be appointed within 72 hrs of receipt of intimation, survey to start within 48 of appointment, the surveyor to intimate the insured  for essential documents, (if not available in public domain) within 7 days of intimation, Interim report, with copy to insured, may be submitted within 15 days from the date of first visit, The report to be submitted within 30 days of appointment unless there is delay in submission of documents/ noncooperation by insured which must be duly recorded.
15. In case of large/commercial risks, the time limit is 90 days.
16. The claim to be settled within 30 days of receipt of final report or last necessary document from insured. In case of exceptional delay, the insurer to give fortnightly status report to insured and provisional payment may be considered in such cases.
17. In case of delay 2% interest over and above the prevailing bank rate for that fiscal for the entire period of TAT.
18. The 2017 regulations have also prescribed the procedure to be followed by insurers for Redressal of grievances of policy holders. Whereas, 2002 regulations required each insurer to have in place a grievance Redressal mechanism only.

Recently, we have seen some new and glaring examples of the protection of policyholders’ interest, when the Govt. and IRDAI, extended the time to deposit the premium for renewal of TP and Health Insurance policy thereby allowing the constant cover up to 15^th of May due to Lock down on outbreak of Covid -19. Off late, in a move ensure safety and business continuity during Covid -19 outbreak. the IRDAI has directed the insurers for conducting the KYC of customers via Video Identification Process (VBIP).

How far the PPHI Regulations are effective and ways to improve—Strictly speaking, there is greater need to make the people aware of these regulations to enable them invoke their rights. Needles to state, it will also make the insurers serious for timely compliance of their obligations. The compliance of PPHI regulations should also be made a part of internal audit, for the sake of improvement.

Other Avenues for the protection of Customers Interest—In addition of the above regulations, the customers rights are also protected by Insurance Ombudsman and The Consumer protection Act besides citizens Charter. However, the Insurance Ombudsman can be approached by Individual policy holders only. The other unparallel benefits of approaching the Insurance ombudsman are that the policy holder neither required to pay any court fee nor to engage any advocate to plead his case. Further, the insurers are barred to challenge the orders of Insurance Ombudsman before High courts.

So far as the Policy holders’ rights under Citizens ‘Charter are concerned, it includes the expectation of the organization from customers to fulfill its commitment. Therefore, the insurer can be held accountable only when the policy holder comply his obligations.

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