IRDA has deferred the implementation of standard proposal form for life insurance policies for an indefinite period which was earlier scheduled to be implemented from April 1, 2014. The reason behind this delay is not clear; however, the insurance regulator said that it has received representations from various insurance companies.
In a circular, the regulator has said, “The implementation of obligations of IRDA’s standard proposal form for life insurance regulation 2013 are deferred until further notice to facilitate a more comprehensive debate consultations on various provisions.”
Earlier in October 2013, IRDA had deferred the compliance date for standard proposal form from October 15, 2013 to April 1, 2014.
Industry experts suggest that some insurance companies requested IRDA to simplify the format of standard proposal form. They are also seeking time to train insurance agents on the new guidelines. However, according to industry sources, IRDA has not responded to their requests so far.
IRDA introduced a standard proposal form which aims to bring transparency in sales process in order to curb mis-selling in life insurance products. The 12-page form comprises four sections: A) details of prospect; B) specialized/additional information; C) suitability analysis; and D) recommendations. It will be mandatory for all life insurance companies, agents, insurance brokers and banks to fill the standard proposal form as and when it is implemented.
IRDA has also clarified that the standard proposal form regulations are not applicable for micro insurance and product distributed through CSC channels.