IRDAI Sets Up Committee To Simplify Insurance Policy Wordings

New Delhi: Regulator Irdai on Thursday set up a committee to simplify the wording of insurance policies to help people make an informed decision before buying cover. The eight-member committee has been asked to submit its recommendations within 8-10 weeks.

Committee To Examine Existing Policy Wording

In a circular, the Insurance Regulatory and Development Authority of India (Irdai) said policyholders often find it difficult to comprehend the terms and conditions in insurance policy contracts because of the complexity of the language used. This causes confusion among policyholders while purchasing an insurance policy, Irdai said in an office order on the "Committee for Plain Language for Policy Wordings."

Irdai Committed To Insurance For All By 2047

Irdai is committed to insurance for all by 2047. To attain this objective, efforts are being made towards creating a progressive, supportive, facilitative, and forward-looking regulatory architecture to foster a conducive and competitive environment leading to wider choice, accessibility, and affordability to policyholders, it said.

Panel To Suggest Simple And Plain Wording

The panel has been asked to examine the existing insurance policy wording and suggest simple and plain wording that is legally correct and enforceable. Suggesting simple policy wordings that clearly specify the obligations and responsibilities of each of the parties to the contract is also one of the terms of reference given to the panel.

Specifications For Typefaces And Presentation

It has also been asked to suggest specifications like typefaces for written material and presentation thereof, for both print and electronic records that are easily readable and comprehensible.

The move is aimed at making insurance policies more consumer-friendly and easier to understand. The committee's recommendations are expected to help policyholders make informed decisions while buying insurance.