INDIA Law and Practice Contributed by: Neeraj Tuli, Celia Jenkins and Rajat Taimni, Tuli & Co
by the erstwhile All India Fire Tariff 2001, have been de-notified with effect from 1 April 2021. The other remaining tariffed lines under fire, motor (ie, All India Motor Tariff), engineering, marine and workers’ com- pensation also stand de-notified with effect from 1 April 2024. For health insurance policies, the IRDAI had previously specified a standard set of definitions, general condi- tions, exclusions, standard nomenclature for critical illnesses, and a standard list of generally excluded expenses. However, pursuant to the IRDAI (Insurance Products) Regulations 2024 (the “Products Regula- tions”) and the IRDAI’s Master Circular on Health Insurance Business 2024 of 29 May 2024 (the “Health Master Circular”), the IRDAI has done away with the above-mentioned standardisation requirements and now offers more flexibility to health insurers vis-à-vis coverage and presentation of health insurance poli- cies. Policy Terms There are also extraneous rules that affect policy terms – for example, the Insurance Act gives the poli- cyholder the right to override contrary policy terms in favour of Indian law. The IRDAI (Protection of Policy- holders’ Interests, Operations and Allied Matters of Insurers) Regulations 2024 (the “Policyholders Reg- ulations”) along with the IRDAI’s Master Circular on Operations and Allied Matters of Insurers of 19 June 2024 and Master Circular on Protection of Policyhold- ers’ Interests 2024 of 5 September 2024 prescribe certain matters to be mandatorily incorporated in life insurance, general insurance and health insurance policies. Some of the key requirements are: • the name and unique identification number (UIN) allotted by the IRDAI for the product, its terms and conditions, and details of the sales person; • benefits payable and the contingencies upon which these are payable, as well as the other terms and conditions of the insurance contract, including any riders/endorsements; • details of the nominee(s); • the premiums payable, frequency of payment, grace period allowed, and implications of discon- tinuing the payment of an instalment of the pre- mium;
• any special clauses, exclusions or conditions imposed on the policy; • the address and email of the insurer to which all communications in respect of the policy must be sent; • details of the insurer’s internal grievance redressal mechanism, along with the right of the insured to approach the insurance ombudsman that has the requisite territorial jurisdiction; • procedure to register a claim/grievance; • issuance of the Customer Information Sheet; and • the list of documents that are normally required to be submitted in the event of a claim. Where exclusions are to be stipulated in the policy, the Policyholders Regulations require that – wherever possible – insurers must endeavour to classify the exclusions into the following: • standard exclusions applicable to all policies; • policy-specific exclusions that cannot be waived; and • exclusions that can be opted for a cover by paying an additional premium. Similarly, to provide the policyholder with clarity and understanding of the conditions, insurers are also required to try to broadly categorise policy conditions into the following: • conditions precedent to the contract; • conditions applicable during the contract; • conditions when a claim arises; • conditions for the renewal of the contract; • conditions for cancellation of the contract; and • conditions for grievance redressal. Although a broad product classification based on the target customer base exists under general insurance and health insurance policies in India, the above-men- tioned requirements apply uniformly to both consumer and commercial contracts. In 2020–21, the IRDAI standardised various general, health, and life insurance policy wordings that insur- ance companies must follow. However, the IRDAI has recently expressly repealed such standardised word-
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