IRDAI vide Master Circular bearing reference no: IRDAI/ACTL/MSTCIR/MISC/89/06/2024 dated June 12, 2024, issued Master Circular on Life Insurance Products (“ Life Products Master Circular 2024 ”). The Life Products Master Circular 2024 shall apply to all Insurers transacting general insurance business in India.
Major highlights of the Master Circular are as follows:
1. General Information for the Policyholders/Prospect/Customers: Life Insurers shall comply with the requirements and conditions specified in Chapter I of the Life Products Master Circular 2024, which are as follows:
a. Accessibility to a wider choice of Products/add-ons/riders to policyholders/prospects.
b . Customer Information Sheet (CIS): CIS shall be provided to the policyholder against his acknowledgement.
c. Benefit Illustration for Life insurance products
d. The following key features shall be provided to the policyholder:
i. Benefits payable on survival including maturity benefits,
ii. Benefits payable on death
iii. Benefits payable on surrender of the policy
iv. Availability of policy loan
v. Lock-in period of 5 years for Linked Insurance Products
vi. Partial Withdrawal
vii. Top-up
viii. Switches
e. Insurers shall provide a free look period of 30 days (from the date of receipt of the policy document) to every policyholder to review the terms and conditions of the policy.
f. Nomination and Assignment of Life Insurance Product
Premium paid
Grace Period
Premium is paid in monthly instalments
15 days
Premium is paid in quarterly/half-yearly/annual instalments
30 days
During grace period, the policy is considered to be in force. Risk cover shall be available without any interruption as per the terms & conditions of the policy.
g. Splitting of Policies
h. No policy of life insurance shall be contestable on any ground whatsoever after expiry of three years from the date of the policy.
i. Technological Advancement and End to End Technology Solutions.
j. Life Insurers shall provide training to distribution channels with respect to existing and new products offered by the Insurers.
2. General Principles for the Life Insurers: Life Insurers shall comply with the requirements and conditions specified in Chapter 2 of the Life Products Master Circular 2024, which are as follows:
a. Implementation of IRDAI (Insurance Product) Regulation, 2024:
i. Existing products not complying with the provisions as referred above can continue for new business for a limited period up to September 30, 2024 and shall be withdrawn for new business or modified as per the extant product approval process on or before September 30, 2024.
ii. Life Insurers shall submit the statement of products as per the format provided under Certificate V to Certificate – VIII of part B of Section VIII of the Life Product Master Circular, 2024 to IRDAI by October 15, 2024.
b. Product Governance Framework: Life Insurance shall have a well-document Board approved policies which are as follows:
i. Product design, pricing and product management (Board Approved Product Management & Pricing Policy): This policy shall cover internal governance framework aimed at meeting the principles on product design and pricing of insurance products.
ii. Underwriting Policy: This policy shall cover risk assessment, nature of risk to be unwritten, unwriting philosophy of the company, delegation of underwriting authority to different levels of management of specific persons.
iii. Advertisement Policy
c. Principles for the constitution of Product Management Committee, Advertisement Committee.
d. Roles and Responsibilities of Product Management Committee and Advertisement Committee.
e. Additional provision on pricing of Life Insurance Products.
f. Provisions applicable to both Linked and Non-Linked Life Insurance Products: Requirements relating to Renewal of premium in advance, and approval of innovative products. The product documents shall mention the following:
i. Par/non-par
ii. Linked/non-linked
iii. Life/Pension/General Annuity/Health
iv. Individual/Group
v. Savings/Pure risk product
g. Provisions applicable to Non-Linked Life Insurance Products: Life Insurers having Non-linked Life Insurance Products, shall comply with the requirements related to product details, Minimum policy term, Surrender Value, Special Surrender Value, Loan, Market Value Adjustment.
h. Provisions applicable to Non-Linked Pension Products: Life insurers having Non-Linked Pension product as their product shall comply with the requirements relating to product details, options on surrender or vesting, options to the nominee on death of the policyholder, and partial withdrawal.
i. Provisions applicable to Group Fund Based Non-Linked Pension Products
j. Requirements for Annuity Products
k. Requirements for Group Products
l. Requirements concerning benefit disclosures
m. Provision applicable to Linked Life Insurance Product: Life insurers having Linked Pension product as their product shall comply with the requirements relating to product details, guarantees on policy benefits, minimum policy term, premium payment term, discontinuance terms, minimum guaranteed interest rate on discontinue policy fund, discontinuance of policy after the lock-in period, revival of a discontinued policy, top-up premium, partial withdrawals, settlement options.
n. Provisions applicable to group fund-based unit-linked insurance products.
o. Requirements concerning asset allocation under each fund.
p. Series or Tranche of Funds and highest NAV guarantees under linked insurance products
q. Disclosures Norms for all linked insurance products
r. Customized benefits illustration
s. Product Approval Process: Life Insurers have been advised to comply with any of the following procedures:
i. Use & File (U&F): Procedures are specified under Part A of Section V, Chapter 2 of the Life Products Master Circular 2024.
ii. File & Use (F&U): Procedures are specified under Part B of Section V, Chapter 2 of the Life Products Master Circular 2024.
iii. Document management for File & Use and Use & File procedures: Procedures with respect to document management for U&F and F&U are specified under Part C of Section V, Chapter 2 of the Life Products Master Circular 2024.
t. Methodology concerning Unique Identification Number (UIN).
u. Modification permitted to withdraw Life insurance products
v. Application Forms and General Instruction (Applicable to products or riders filed under U&F and F&U procedure).
w. The Life Products Master Circular supersedes the following Circulars/Guidelines:
i. Circular on filling of Products/Riders for Life Insurance Business bearing reference no. IRDAI/ACTL/CIR/PRO/207/10/2022 dated October 04, 2022.
ii. Use and File Procedures for Life Insurance Products bearing reference no. IRDAI/ACTL/CIR/PRO/81/3/2023 dated March 31, 2023.
iii. Use and File procedures for Life Insurance Products bearing reference no. IRDAI/ACTL/CIR/PRO/135/06/2023 dated June 20, 2023.
iv. Modifications permitted to withdrawn products of Life Insurers bearing reference no. IRDAI/ACTL/CIR/PRO/166/08/2023 dated August 31, 2023.
v. A copy of the Life Products Master Circular 2024 is attached herewith for your ready reference.
Source category: IRDAI
Attachments
- /2024/403_2024_06_12_-_IRDAI_Master_Circular_on_Life_Insurance_Products.pdf
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