Irda may disallow prepayment of insurance policy premium

The Insurance Regulatory and Development Authority wants to curb mis-selling by agents and brokers who ask people to make advance payments to avail of discounts on premiums.

Print Edition: 31 Mar, 2012

https://akm-img-a-in.tosshub.com/businesstoday/images/story/201204/policy-premium_505_022812053946.jpg

Planning to pay your policy premium in advance before you leave for a trip? This might not be possible any more as the Insurance Regulatory and Development Authority (Irda) may soon disallow insurers from accepting advance premium payments.

SPECIAL: Are you insured enough?

The draft norm says life insurers can now accept premiums only 15 days before the renewal date from those paying monthly and only 30 days before the due date in case of other payments.

MUST READ: Pledge your insurance policy for a loan

The objective of the regulator is to curb mis-selling by agents and brokers asking people to make advance payments to avail of discounts on premiums.

Till now, many insurers accepted premium payments months in advance of the due date from the policyholder and the customer in return would either earn some interest or get a small discount.

MUST READ: New age insurance covers

In separate draft guidelines, the insurance regulator has instructed all life and general insurers to underwrite policies to cover people living with HIV/AIDS and people who might be vulnerable to the disease, such as nurses and doctors.

Irda has asked insurers to cover people who are not showing symptoms of AIDS but are in Stage I and II of HIV infection and are in compliance with treatment protocols of the medication.