The Insurance Regulatory and Development Authority of India (IRDAI) has constituted a 12-member committee for simplification of insurance policy wordings.
Consisting of Insurance Advisory Committee members, General and Life Insurance Councils as well as IBAI representatives, Principal Officer, State Bank of India (corporate agent) and a few of its own senior officials, the committee has been tasked to “examine existing insurance policy wordings and suggest simple, plain wordings that are legally correct and enforceable.”
The terms of reference require the committee to come up with simple policy wordings that clearly specify obligations and responsibilities of all parties to the contract. It is also required to suggest specifications such as typefaces for written material and presentation, for both print as well electronic records that are easily readable and comprehensible, IRDAI said.
Setting a 8-10 week time frame for submission of the recommendations, IRDAI permitted the committee to rope in external experts, if needed. The committee comes in the backdrop of difficulties policyholders encounter in comprehending the terms and conditions in insurance policy contract because of “complexity in language used. This leads to the policyholder [getting] confused... to make informed decisions while purchasing an insurance policy,” the insurance regulator, which is pursuing an insurance for all by 2047 goal, said.
