IRDAI Reg Section 17 : Refund of Premium

Explanation using Example

Example 1: Policy Cancellation and Refund Process

Introduction: John, a resident of Mumbai, purchased a health insurance policy from XYZ Insurance Company. After reviewing the policy terms, he decided to cancel it within the free-look period due to dissatisfaction with the coverage.

Application: According to Section 17(1) of the IRDAI Regulations, 2024, when a refund of premium is due because of policy cancellation, the refund must be made to the bank account of the policyholder, proposer, or nominee(s) via electronic transfer. XYZ Insurance Company is required to refund the premium directly to John's bank account.

Outcome: XYZ Insurance Company processes the cancellation and initiates the refund to John's bank account as per the details collected at the proposal stage, complying with Section 17(2). If the company fails to refund electronically, it may face regulatory action for non-compliance.

Conclusion: By adhering to the electronic transfer requirement, XYZ Insurance ensures compliance with the IRDAI Regulations, avoiding potential penalties and maintaining customer trust.

Example 2: Alteration of Policy Terms

Introduction: Priya, who holds a life insurance policy with ABC Insurance, requests an alteration to her policy terms to increase the sum assured. This change affects the premium amount she initially paid.

Application: As per Section 17(1) of the IRDAI Regulations, 2024, if a refund of premium becomes due due to alteration in policy terms, the refund must be electronically tran...

Login to access all pages and read more content.

To disable ads and read rest of the premium content, subscribe to KanoonGPT Pro.