All insurers must offer basic cover, meet settlement deadlines: IRDAI

The new rules that come into force with immediate effect also let customers choose durations shorter or longer than a year.

Under the new , insurance companies are prohibited from rejecting claims due to insufficient documentation. All necessary documents must be requested at the time of underwriting the proposal, the regulator has said. Customers will only need to submit documents directly related to claim if cashless services are not available.

Policyholders will now have the option to cancel their policies anytime without providing a reason. Insurers, on the other hand, can only cancel policies on the grounds of established fraud. In the event of cancellation, the insurer is required to refund the proportionate for the unexpired policy period.

IRDAI has also imposed strict timelines for the settlement of claims, including specific turnaround times for the appointment of surveyors and the submission of their reports.

Surveyors must submit their reports within 15 days, and insurers should resolve claims within seven days of receiving these reports.

If they don't comply with an ombudsman order, they face a penalty of ₹5,000 per day.

Also, the regulator has removed the contribution clause for multiple policies. Now, policyholders can from their multiple insurance policies without facing deductions due to overlapping coverage. Insurers will have to cover the full claim amount without splitting it among policies.