IRDAI Reg Section 9 : Prospectus of Insurance Products
Act
Summary
Section 9 of the IRDAI Regulations, 2024, mandates insurers to provide a comprehensive prospectus for each retail insurance product. This prospectus must accurately depict the product's features, benefits, exclusions, and grievance redressal processes. Insurers are responsible for ensuring the prospectus is clear, truthful, and aids policyholders in making informed decisions. The section also requires a customized benefit illustration for certain life insurance products, highlighting both guaranteed and non-guaranteed benefits.
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Explanation using Example
Example 1: Misleading Information in Insurance Prospectus
Introduction: ABC Insurance Company has launched a new health insurance product. The company provides a prospectus that highlights the benefits of the product but fails to mention a significant exclusion related to pre-existing conditions.
Application: According to Section 9(a) of the IRDAI Regulations, 2024, every insurer must ensure that the information given to the prospect or policyholder reflects a true and correct picture of the product's features, benefits, exclusions, and risks. By omitting the exclusion of pre-existing conditions, ABC Insurance is not complying with this requirement.
Outcome: Non-compliance with this provision can lead to legal action against ABC Insurance for providing misleading information. The company may face penalties as specified in the associated penalty clauses of the IRDAI Regulations. Additionally, affected policyholders may file complaints with the grievance redressal mechanism, as outlined in Section 9(d)(iv).
Conclusion: To comply with the IRDAI Regulations, ABC Insurance must revise its prospectus to include all relevant exclusions and ensure that the information is clear and accurate. This will help prospects make informed decisions and avoid potential legal consequences.
Example 2: Absence of Customized Benefit Illustration
Introduction: XYZ Life Insurance Company offers a life insurance product with both guaranteed and non-guaranteed benefits. However, the company does not provide a customized benefit illustration at the point of sale.
Application: As per Section 9(d)(a) of the IRDAI Regulations, 2024, insurers must provide a customized benefit illustration for life insurance products that do not have all benefits assured in absolute amounts. This illustration should show both guaranteed and non-guar...
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