CEOs of all General Insurance companies Sub: Free Look Period in Health Insurance Policies issued by General Insurance Companies Under the provisions of Section 14 (1) and Section 14 (2) (b) of the IRDA Act, 1999, the Authority issues the following instructions on the subject of free look period for health insurance policies issued by general insurance companies: 1. All health insurance policies which have a duration of three years or more, will include a provision within the meaning of section 7 (m) of IRDA (Protection of Policyholders’ Interests) Regulations, 2002, that on the first inception of the policy, the insured has a period of 15 days from the date of receipt of the documents to review the terms and conditions of the policy. Where the policyholder disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection,when he shall be entitled to a refund of the premium paid, subject only to a deduction of the expenses incurred by the insurer on medical examination of the insured persons and the stamp duty charges. In cases where the risk has already commenced when the option of returning the policy is exercised by the policyholder, the refund of the premium paid will also be subject to a deduction for proportionate risk premium for the period on cover. Where only part of the risk (e.g. only accidental hospitalization risk) has commenced, such proportionate risk premium shall be calculated as commensurate with the risk covered during such period. 2. Insurers can also voluntarily opt to provide such a free look period even in health insurance policies of duration less than three years. However, the terms and deductions admissible will continue to be as provided for in the paragraph 1 above. This circular shall take effect for all policies issued or renewed on or after 1 st of October, 2009. All general insurance companies are advised to ensure due compliance with the provisions contained in the circular as any failure to do so would render them liable to appropriate action under the provisions of IRDA Act, 1999, the Insurance Act, 1938 and the regulations framed thereunder.
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