IRDA has mandated insurance companies to issue policy documents in regional languages recognised under constitution of India in a move to simplify jargons and increase transparency. IRDA has asked insurance companies to make such forms available on their websites so that they can be easily accessed and downloaded by policyholders.
However, the regulator has clarified that this requirement is exempted for post-sale services i.e. forms related to claims, loans, surrender alteration, nominations, assignments, revivals etc.
In a circular, IRDA said, “As policy servicing is one of the critical components of the insurance contracts, various service forms / formats that are made available to the policyholders during the course of policy service shall have clarity in terms of the print-size and shall facilitate complete understanding in terms of the language. Therefore, all the Insurers are advised to make available all the policy servicing forms also in languages recognized under the Constitution of India so as to meet the requirements of policyholders. The insurers may also make available these forms ‘in languages recognized under the Constitution of India’ on their website so that the forms may be accessed easily. It is envisaged that this initiative benefits in increasing informed decisions by policyholders / beneficiaries.”
An insurance ombudsman told Cafemutual that many complaints lodged with the insurance ombudsman are due to mis-interpretation of policy document. He said that the move will help people easily understand the clauses of policy documents.
Also, IRDA has asked insurance companies to maintain a minimum font size of 7 in ‘Times New Roman’ in policy documents to make it legible. The regulator said, “There is a need to maintain a reasonable font size in all the forms by all insurers. Therefore, all insurance companies are advised to use a minimum print equivalent to font “Times New Roman - size no. 7” or above in respect of all the forms that are made available to both prospects and policyholders both during the course of granting the cover and subsequent policy servicing.”
Earlier, in December 2013, the insurance regulator had assured insurers that this process will not have significant impact on their costs.