Riders are add-ons to the basic insurance policy to supplement the cover provided. One can also combine a set of riders and append it to the main policy. The premiums will, obviously, undergo an upward revision, depending on the rider or a combination of them chosen.
New Delhi, Policy holders will now get a clearer picture on the riders they wish to add to their basic life insurance products.
The Insurance Regulatory and Development Authority (IRDA) in a circular issued to the life insurance companies has said that they must use appropriate forms for riders which are to be attached to the specific or main product.
Riders are add-ons to the basic insurance policy to supplement the cover provided. One can also combine a set of riders and append it to the main policy. The premiums will, obviously, undergo an upward revision, depending on the rider or a combination of them chosen.
The circular has come into force from July 4. As for “the riders which are offered by the companies, as on the date the circular comes into effect, there is no need to file their features in the new format with the Authority. However, if any modification is proposed, then the new format must be used. Those riders filed with the Authority for which approval is in the process, they need not file the features in the new format,” Dr R Kannan, Member (Actuary), Insurance Regulatory and Development Authority, told Business Line.
The Insurance Regulatory and Development Authority (IRDA) in a circular issued to the life insurance companies has said that they must use appropriate forms for riders which are to be attached to the specific or main product.
Riders are add-ons to the basic insurance policy to supplement the cover provided. One can also combine a set of riders and append it to the main policy. The premiums will, obviously, undergo an upward revision, depending on the rider or a combination of them chosen.
The circular has come into force from July 4. As for “the riders which are offered by the companies, as on the date the circular comes into effect, there is no need to file their features in the new format with the Authority. However, if any modification is proposed, then the new format must be used. Those riders filed with the Authority for which approval is in the process, they need not file the features in the new format,” Dr R Kannan, Member (Actuary), Insurance Regulatory and Development Authority, told Business Line.
Rider form
The circular states that the ‘Form IRDA-Life-Rider’, shall be the application form for the riders which are to be attached to a specific product which could be either linked or non-linked.
The same form has to be used for group riders too until specified by the IRDA.
“If a life insurer wishes to offer riders along with a basic life insurance product, the insurer must furnish the information in respect of each rider separately using the form,” the circular states.
The circular states that the ‘Form IRDA-Life-Rider’, shall be the application form for the riders which are to be attached to a specific product which could be either linked or non-linked.
The same form has to be used for group riders too until specified by the IRDA.
“If a life insurer wishes to offer riders along with a basic life insurance product, the insurer must furnish the information in respect of each rider separately using the form,” the circular states.
Clearance vital
Dr Kannan also said unless the rider is cleared by the IRDA, it cannot be attached to any of the base products.
“The form has to be used whenever a rider is first filed with the Authority and attached to life insurer’s product for the first time. And whenever a rider is modified (already attached to a product), this form should be used for modification of the existing rider. Only items relevant to the proposed modification have to be filled in and all the other items should reflect ‘no change from the earlier filing’. Finally, whenever a rider is further added to second or subsequent product, the relevant portions of the said form has to be furnished,” the circular said.
“The notification is important in today’s context as many life insurance companies are using the same file and use features which are applicable to the main policies to offer rider products. In order to bring to surface the special features of the rider products, the circular is very useful. It also helps the policy holder to get a better understanding of the policy,” Dr Kannan said.
According to estimates around 20 to 25 per cent of the new premium income comes from rider products.
Dr Kannan also said unless the rider is cleared by the IRDA, it cannot be attached to any of the base products.
“The form has to be used whenever a rider is first filed with the Authority and attached to life insurer’s product for the first time. And whenever a rider is modified (already attached to a product), this form should be used for modification of the existing rider. Only items relevant to the proposed modification have to be filled in and all the other items should reflect ‘no change from the earlier filing’. Finally, whenever a rider is further added to second or subsequent product, the relevant portions of the said form has to be furnished,” the circular said.
“The notification is important in today’s context as many life insurance companies are using the same file and use features which are applicable to the main policies to offer rider products. In order to bring to surface the special features of the rider products, the circular is very useful. It also helps the policy holder to get a better understanding of the policy,” Dr Kannan said.
According to estimates around 20 to 25 per cent of the new premium income comes from rider products.
Conditions laid
The circular also states that insurers must not alter the riders in any manner subsequent to clearance under the file and use procedure without the concurrence of the Authority.
It also states that if an insurer wishes to withdraw an existing rider in the market, it may do so, but has to inform the Authority giving reasons for the withdrawal within seven days from the date of withdrawal.
Finally, the circular also states that no change in the name of the rider is permitted once it is cleared and a unique identification number is allotted by the IRDA.
The circular also states that insurers must not alter the riders in any manner subsequent to clearance under the file and use procedure without the concurrence of the Authority.
It also states that if an insurer wishes to withdraw an existing rider in the market, it may do so, but has to inform the Authority giving reasons for the withdrawal within seven days from the date of withdrawal.
Finally, the circular also states that no change in the name of the rider is permitted once it is cleared and a unique identification number is allotted by the IRDA.
Source: Business Line
No comments:
Post a Comment