IRDAI issues additional period for life insurance policies

Apr 07, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The Insurance and Regulatory and Development Authority of India (IRDAI) on April 04, 2020, has issued a Circular for providing additional grace period for life insurance policies in addition to Circular No. IRDA/Life/Cir/Misc/072/03/2020 dated March 23, 2020. The Authority had received several representations from Life Insurers and the Life Insurance Council expressing difficulties being faced by policyholders due to nationwide three weeks lockdown and social distancing norms for COVID-19 pandemic.

Thus, the life insurance policies whose premiums fall due in March and April 2020, an extension of 30 days has been provided. The situation where the unit linked policies mature and fund value is to be paid in lumpsum, the life insurers may offer settlement options in accordance with Regulation 25 of IRDA (Linked Insurance Products) Regulations, 2013. This onetime option is regardless of whether such option exists or not in the specific product. The life insurers however, have to exercise all due care and diligence to explain clearly the possible downside risk of continued fluctuation of fund value based on daily NAV and clear consent has to be obtained from the policyholder. This is allowed for unit linked policies maturing up to May 31, 2020.

[Circular No. IRDAI/Life/Cir/Misc/078/04/2020]


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