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In a recent development, IRDAI has constituted a dedicated committee to simply policy wordings to make policy terms understandable for policyholders.
Explaining the rationale, the regulatory authority said in a circular, “Policyholders often find it difficult to comprehend the terms and conditions in insurance policy contract because of complexity in language used in the policy. This leads to the policyholder confused and lack of knowledge required to make decisions while purchasing an insurance policy.”
In an endeavor to simplify policy wordings by using a language understandable to policy holders, IRDAI has constituted a 12-member committee.
The committee will:
- Examine the existing policy wordings and suggest simple and legally enforceable words
- Suggest simple language that clearly mentions the obligations and responsibilities of parties to the contract
- Suggest typefaces for written material and presentations for print and electronic media to make it easily readable and understandable
It will also look into any other matter that may be referred to it. Also, it may involve external experts as necessary.
The regulator has also asked the committee to submit its recommendation within 8-10 weeks from the date of its formation.
