IRDAI Reg Section 14 : Group Insurance Policies
Act
Summary
Section 14 of the IRDAI Regulations, 2024, outlines the criteria for legitimate group insurance policies. It mandates that groups must exist prior to policy issuance and prohibits forming groups solely for insurance purposes. In employer-employee scenarios, the employer acts as the master policyholder, while employees are beneficiaries. For non-employer groups, an administrator is the master policyholder, and insurers must provide certificates of insurance to all members.
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Explanation using Example
Example 1: Formation of a Legitimate Group for Insurance
Introduction: A group of friends, led by John, decides to form a club called "Weekend Warriors" with the sole purpose of getting a cheaper group insurance policy for their hiking trips. They approach an insurance company to avail of group insurance.
Application: According to Section 14(1) of the IRDAI Regulations, 2024, a group cannot be formed solely for the purpose of availing insurance. The insurance company, upon reviewing the application, finds that the "Weekend Warriors" club was formed just to get insurance benefits and does not have any other legitimate purpose or history of existence.
Outcome: The insurance company denies the application for group insurance, citing non-compliance with Section 14(1). The friends are informed that they must have a legitimate group purpose and existence prior to seeking insurance.
Conclusion: This example illustrates the importance of having a legitimate group purpose and existence before applying for group insurance. Non-compliance with this provision results in denial of insurance coverage.
Example 2: Employer-Employee Group Insurance Policy
Introduction: XYZ Corporation decides to provide group health insurance to its employees as a part of their benefits package. The HR department negotiates a group insurance policy with an insurer.
Application: As per Section 14(2)(ii) of the IRDAI Regulations, 2024, in an employer-employee group, the employer (XYZ Corporation) is the master policyholder, and the employees are the beneficiaries. XYZ Corporation must issue confirmation of insurance cover to each employee, referencing the group policy.
Outcome: XYZ Corporation successfully arranges the group insurance policy. Each employee receives a confirmation letter detailing their coverage under the group policy. The insurer ensures compliance by providing the necessary documentation to the employer.
Conclusion: This scenario demonstrates the proper procedure for employer-employee group insurance, ensuring that employees are informed of their coverage. Compliance with Section 14(2)(ii) is crucial for legal and operational clarity.
Example 3: Non-Employer-Employee Group Insurance Policy
Introduction: A professional association, "Tech Innovators," decides to offer group insurance to its members. The association's board appoints an administrator to handle the insurance arrangements.
Application: Under Section 14(2)(iii) of the IRDAI Regulations, 2024, the administrator acts as the master policyholder and must have authority from the members to arrange insurance. The insurer is responsible for issuing a certificate of insurance to each member, detailing benefits, premiums, and terms.
Outcome: The administrator successfully negotiates the group policy, and the insurer issues certificates to all members. Each certificate includes the schedule of benefits, premium details, and key terms, ensuring transparency and compliance.
Conclusion: This example highlights the process for non-employer-employee group insurance, emphasizing the roles of the administrator and insurer in ensuring compliance with Section 14(2)(iii).
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