IRDAI’s New Directive: No Premium Collection Before Policy Acceptance

According to the new IRDAI Master Circular on Protection of Policyholders’ Interests, issued on September 5, 2024, insurers can only request payment of the premium or premium deposit after they have accepted the proposal. Risk cover will start only once the premium is received. No premium deposit is needed with the proposal form, except when policies are issued based on a declaration of good health, where risk cover begins immediately upon receiving the premium.

There should be no scope for either short or excess collection of premiums. Insurers must obtain explicit consent from the prospect or policyholder for the deduction of the premium payment amount from their bank account. Upon acceptance of the proposal and receipt of the premium, insurers must issue the insurance policy in electronic form.

Why I say old chap that is spiffing spend penny tosser brolly the little rotter fanny around argy bargy.

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