Irdai tells insurers to provide simplified policy information document starting January 1

The Insurance Regulatory and Development Authority of India (Irdai) has proposed an initiative to simplify customer information sheets (CIS) for health insurance policyholders. A CIS outlines key policy details and is given to the customer on purchasing or renewing a policy. The initiative aims to make these sheets easier to understand as they sometimes contain complex legal jargon. 

Insurers need to ensure policyholders understand the terms of their policy. The document is sometimes complicated with legal terms. Therefore, a simpler, more straightforward document with crucial policy information is needed. 

The Irdai circular states, “It is important for a policyholder to understand the terms and conditions of the policy that has been purchased. Since a policy document may be fraught with legalese, it is imperative to have a document that explains, in simple words, the basic features concerning the policy and provides necessary information.” 

The CIS initiative responds to the need for greater transparency between the insurer and policyholder. The Irdai has noticed a rise in complaints because of a lack of symmetry in information between the insurer and policyholder. 

Dhirendra Mahyavanshi, CEO & Cofounder, Turtlemint, said, "We see it as an affirmation of our commitment to demystify insurance for all. These changes prioritise the interests of policyholders by ensuring they receive clear and concise information about their insurance policies. Policyholders must completely understand the terms and conditions of their insurance coverage. With the revised customer information sheet (CIS) now in place, policyholders will have easy access to vital information, such as the sum assured, policy coverage, exclusions, claims procedure, and more. This development enhances transparency and empowers policyholders to make informed decisions about their insurance needs."

The CIS redesign intends to offer fundamental policy information in a simple and easily understandable manner. The new CIS format will be effective from January 1, 2024. 

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Certain compliances will have to be observed while implementing the new format, such as: 

a) Insurers, intermediaries, and agents must distribute the updated CIS to all policyholders, ensuring physically or digitally documented confirmation. 

b) If a policyholder wishes, the CIS should be provided in their local language. 

c) The font size on the CIS must be a minimum of 12 (Arial) or bigger. 

d) All areas in the CIS must be completed. 

e) The forwarding letter for the policy document should cite a reference to the CIS. 

The insurer is also expected to confirm receipt of the CIS by the policyholder as dictated by the Irdai circular. 

The regulator has taken a significant step towards promoting transparency and enhancing policyholder awareness regarding their health insurance policies. It also highlights the obligations of policyholders to make transparent and fair disclosures of relevant material information pertaining to their health, as non-disclosure of the same may affect the claim settlement. The insurers are also required to obtain signatures of the policyholders confirming that they have noted the details of CIS and received it.