IRDAI clarifies on the Master Circular on Point of Sales Products and Persons

Mar 09, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Insurance Regulatory and Development Authority of India (IRDAI) on March 09, 2020, clarifies on the Master Circular on Point of Sales Products and Persons – Life Insurance ref No. IRDAI/LIFE/CIR/MISC/215/12/2019 dated December 02, 2019.

The following clarifications or modifications are as under:

Ø  Clause 26 has been substituted, namely:

In cases of other than Single Premium mode, where premium paying term (PPT) is different from the policy term (PT):

(i)                  PPT shall not be less than five years.

(ii)                The PPT being different from policy term shall be clearly communicated to the prospect at the Point of Sale and in Key Features Document (KFD).

Ø  Clause 16 has been substituted, namely:

16.1: The existing Non-POS products which meet the parameters of the allowed categories of POS Life Insurance products may be filed, subject to the boundary conditions as applicable to POS Life products, under existing provisions of “minor modification”, enclosing KFD. The Waiting Period clause, if applicable, shall continue to be made part of proposal form as well as KFD. The minor modification should also contain the certificate of CEO and Appointed Actuary of the Life Insurer that the existing product meets the applicable parameters mentioned in the Annexure II to the Master Circular.

16.2: The Insurers shall ensure adequate IT systems and internal controls so that POSP-LI sell policies only upto the allowed POS Life product parameters. IT systems shall also capture the POS Life policies sold through regular non-POS channels. Insurers shall submit a certificate stating that their existing IT systems and internal controls are in compliance to these Guidelines, signed by CEO and Appointed Actuary both in the case of minor modifications and File and Use application in case of new products where POSP-LI is also part of distribution channel. No change in POS Agency Code should be allowed once the policy master record is created except for orphan policies in which case change may be allowed after following due process.

16.3: The gap of at least one year from the last approval/modification of the product mentioned in the Circular “Use and File procedure for certain modifications under existing products and riders offered by Life Insurers”, is not applicable to these Circular provisions.

16.4: The Insurers may continue to offer existing POS products till March 2020 and ensure appropriate systems and sales readiness prior to modifications of the existing Non-POS products.

[Circular No. IRDAI/LIFE/CIR/MISC/ 060 /03/2020]


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