IRDAI Regulations 2024: Comprehensive Overview of Policyholder Protection and Insurer Operations
5. Definitions applicable to Part A
Chapter 1 - Activities Prior to Sale of Insurance Policies
Prospectus of Insurance Products
Bare Act
9. Prospectus of Insurance Products
- a. Every insurer shall ensure that the information given to the prospect or the policyholder about the product offerings shall reflect a true and correct picture about the features, benefits, exclusions, risks, options, exit options including grievance redressal in clear and simple terms.
- b. Every insurer shall develop and maintain a prospectus for every retail insurance product including riders or add-ons thereto and make available such prospectus on their website.
- c. The Competent Authority shall specify minimum information to be incorporated in the prospectus.
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d. Insurers shall be responsible for the contents of the prospectus and shall ensure that
- a. no sale of insurance product is made without prospectus, explaining all the benefits, features, terms and conditions of the product and providing benefit illustration to the prospect, wherever applicable.
Explanation: Except for those life insurance products where all the benefits are assured in absolute amounts at the outset of the contract, all other life insurance products shall provide the prospective policyholder a customized benefit illustration at the point of sale, illustrating the guaranteed and non-guaranteed benefits at gross investment returns, as may be specified.
- b. the prospectus enables the prospects or the policyholders to make informed decisions. The benefits and features of the product considering the nuances of the products are explained in clear and concise terms including giving illustration.
- c. there is no misleading or false information.
- d. details of the grievance redressal processes are clearly provided; and
- e. insurer or distribution channel provide all necessary information including any material information in respect of the proposed cover(s) to the prospect to enable the prospect to decide on the best cover(s).
Simplified Act and examples below are previews.
Subscribe to KanoonGPT Pro for full contentSimplified Act
This section of the IRDAI Regulations, 2024, explains the requirements for insurance companies when providing information about their products to potential customers. It ensures that the information is clear, accurate, and helps customers make informed decisions. The section also outlines the responsibilities of insurers regarding the creation and content of a prospectus (a document that descri
Explanation using examples
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 wi
