International Financial Services Centres Authority (IFSCA or Authority) vide its press release dated November 18, 2022 has sought comments / suggestions from general public and stakeholders on the proposed IFSCA (Manner of Payment and Receipt of Premium) Regulations, 2022 (“proposed regulation”).
Background – The IFSCA by virtue of the proposed R egulation s intends to expand the avenues for collection of premium by IIO by adopting international best practices.
Objective – To put in place process for manner of payment, receipt or refund of premium in accordance with Section 64 VB of the Insurance Act, 1938.
The major highlights are as below:
- The proposed Regulations specifies key definitions such as grace period, premium, premium payment warranty clause etc.
- Premium can be paid by proposer/policyholder through recognized instrument of payment using banking channels, bank guarantee in favour of insurer, Cash deposit or any other method or manner of payment as may be specified by the Authority .
- An IIO may assume, continue or terminate assumption of any risk, in accordance with the terms and conditions of the contract of insurance.
- An Insurer and prospect may mutually agree for payment of premium in installments, time schedule and manner of such installment by incorporating premium payment warranty clause
- Premium payment to be guided by premium payment warranty clause in case of facultative reinsurance contract and risk may be assumed without advance premium under automatic reinsurance contract
- Refund of premium on account cancellation of the policy shall be directly credited to the insured in the manner prescribed and shall in no case can be credited to the account of the agent.
- Insurer to have Board approved policy on mitigation of credit risk indicating the consequences of non-payment of premium.
- Insurer shall comply with the requirements as prescribed within six month from the date commencement of the regulation.
Source category: IFSC Insurance Office
Attachments
- /2022/111_IFSCA(~1.PDF
- /2022/111_PRESSR~12.PDF
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