IRDAI POSP Life cheat sheet

Insurable interest in life insurance must exist at proposal; it is not required to continue at death, unlike property insurance where it must exist at loss.

Utmost good faith (uberrima fides) obliges the proposer to disclose all material facts; non-disclosure or misrepresentation within 3 years of policy issue or revival permits repudiation under Section 45 of the Insurance Act, 1938.

Free-look period: 30 days from receipt of the policy document for policies sold through distance marketing or electronic mode; 15 days in other cases. Refund is premium paid less proportionate risk premium, stamp duty and medical examination expenses.

Grace period: 30 days for monthly mode and 15 days for other modes of premium payment; risk cover continues during grace if the policy is in force.

Revival of a lapsed policy is possible within 5 years of the first unpaid premium, on payment of arrears with interest and evidence of continued insurability, subject to the insurer's board-approved terms.

Suicide exclusion: death due to suicide within 12 months of issue or revival entitles the nominee to 80% of premiums paid (excluding extra loading) or the surrender value, whichever is higher, provided the policy is in force.

Term insurance pays the sum assured only on death during the policy term and carries no maturity benefit; endowment pays on survival or death; ULIPs allocate premium to units with NAV-based returns and a lock-in of 5 years.

Participating (with-profit) policies share surplus through bonuses: simple reversionary bonus vests annually, terminal bonus is paid at maturity or death, and interim bonus applies to claims in the year.

Section 41 of the Insurance Act, 1938 prohibits rebating: offering any inducement beyond the terms of the policy is an offence attracting penalty up to Rs.10 lakh.

Saral Jeevan Bima is a non-linked, non-participating, pure risk (term) individual life insurance product mandated by IRDAI for all life insurers, effective 1 January 2021.

Eligibility: entry age from 18 to 70 years (age at maturity up to 70 years) - the minimum entry age is 18 and maximum maturity age is 70; policy term is 5 to 40 years, chosen in whole years.

Sum assured: minimum Rs.5 lakh and maximum Rs.25 lakh; the maximum is subject to the insurer's underwriting policy and no sum assured is available below Rs.5 lakh.

Premium payment: single pay or regular pay (limited or regular premium) with modes yearly, half-yearly, quarterly and monthly; no riders are permitted under this product.

Death benefit is the absolute sum assured payable to the nominee; there is no maturity benefit, no surrender value and no paid-up value under this pure term plan.

Grace period is 30 days for monthly mode and 15 days for other modes; on non-payment within grace the policy lapses and is not revivable beyond the standard revival window.

Waiting period for suicide: 12 months from issue; death by suicide within 12 months returns 80% of premiums paid or surrender value, whichever is higher.

Free-look period of 15 days (30 days for distance marketing) applies; the insurer must refund premium less proportionate risk premium and expenses on cancellation.

Insurers must offer the product with simple, standard policy wording and cannot impose occupation, income or medical tests beyond their standard underwriting; the product is filed under the Use and File procedure.

IRDAI was constituted under the Insurance Regulatory and Development Authority Act, 1999, with its head office at Hyderabad; it replaced the Controller of Insurance.

Insurance Act, 1938: Section 45 limits repudiation for misrepresentation to 3 years; Section 64VA prescribes minimum solvency of 150% of required solvency margin.

Life insurers must maintain solvency margin of 150% of the required solvency margin under IRDAI (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2016.

IRDAI (Insurance Products) Regulations, 2024 govern product design, filing (Use and File or File and Use) and policyholder disclosure; product approval timelines are prescribed for each route.

IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2015 set the minimum paid-up equity capital for a life insurer at Rs.100 crore.

IRDAI (Insurance Advertisements and Disclosure) Regulations, 2000 require prior approval of advertisements and prohibit misleading claims; every advertisement must carry the insurer's registration number and a statement that insurance is the subject matter of solicitation.

IRDAI (Protection of Policyholders' Interests) Regulations, 2017 prescribe the proposal form content, 15-day free-look, grievance redressal and time limits for claim settlement.

The Insurance Ombudsman Rules, 2017 allow a complaint for claim value up to Rs.30 lakh, to be filed within one year of the insurer's rejection; the award must be accepted within 30 days.

Corporate agents and brokers are licensed by IRDAI; individual agents must hold a valid certificate of training and a licence issued under the Insurance Act, 1938.

Channels: individual agents, corporate agents, insurance brokers, bancassurance, direct marketing, web aggregators, insurance marketing firms (IMF) and point of sales persons (POSP).

An individual agent represents one life insurer and one general insurer at a time; a corporate agent may tie up with up to three life, three general and three health insurers.

IRDAI (Insurance Marketing Firms) Regulations, 2015 permit an IMF to distribute products of up to two life, two general and two health insurers through certified insurance marketing firms.

POSP is an individual appointed by an insurer, licensed under IRDAI (Point of Sales Persons) Guidelines, 2015, authorised to sell only pre-approved simple products (such as Saral Jeevan Bima) after passing the prescribed training and examination.

Commission and remuneration are governed by IRDAI (Payment of Commission) Regulations, 2023; commission rates are within the board-approved policy of the insurer and disclosed to policyholders.

An agent must disclose the commission earned on a policy to the prospect and must not rebate; violation of Section 41 of the Insurance Act, 1938 attracts penalty up to Rs.10 lakh.

Solicitation must follow the 'know your customer' and suitability norms; the agent must obtain the prospect's consent, complete the proposal truthfully and forward the premium within the prescribed time.

Web aggregators must display quotes from at least five insurers and disclose the commission earned; they cannot solicit or close a sale directly unless registered as a broker.

Agent duties: prospect identification, need analysis, proposal completion, premium collection and remittance, policy delivery, premium reminders and claim assistance to the nominee.

The agent holds a licence valid for three years from the date of issue, renewable on application with the prescribed fee and proof of training; a lapsed licence can be renewed within the renewal window on payment of a late fee.

Code of conduct under IRDAI (Appointment of Insurance Agents) Regulations, 2016: no misrepresentation, no rebating, no unauthorised premium retention, maintain confidentiality and disclose insurer identity.

Premium collected from a prospect must be deposited with the insurer within 24 hours (or the next working day) and a receipt must be issued; failure is a breach of the code of conduct.

Policyholder rights: free-look cancellation, grievance redressal through the insurer's Grievance Redressal Officer, then IRDAI's Bima Bharosa portal, then the Insurance Ombudsman.

The insurer must respond to a grievance within 14 days; if unresolved, the policyholder may approach the Ombudsman within one year of the insurer's reply or rejection.

Nomination under Section 39 of the Insurance Act, 1938 allows the policyholder to name a nominee; a beneficial nominee (spouse, children, parents) receives the benefit free of succession disputes.

Assignment under Section 38 transfers policy rights; a policy may be assigned absolutely or conditionally, and the insurer must register the notice of assignment.

Claims: the insurer must settle a claim within 30 days of receipt of all documents; where investigation is needed, within 45 days, and interest at 2% above the bank rate applies for delay beyond that.

Insurable interest in life insurance must exist at proposal; it is not required to continue at death, unlike property insurance where it must exist at loss.

Utmost good faith (uberrima fides) obliges the proposer to disclose all material facts; non-disclosure or misrepresentation within 3 years of policy issue or revival permits repudiation under Section 45 of the Insurance Act, 1938.

Free-look period: 30 days from receipt of the policy document for policies sold through distance marketing or electronic mode; 15 days in other cases. Refund is premium paid less proportionate risk premium, stamp duty and medical examination expenses.

Grace period: 30 days for monthly mode and 15 days for other modes of premium payment; risk cover continues during grace if the policy is in force.

Revival of a lapsed policy is possible within 5 years of the first unpaid premium, on payment of arrears with interest and evidence of continued insurability, subject to the insurer's board-approved terms.

Suicide exclusion: death due to suicide within 12 months of issue or revival entitles the nominee to 80% of premiums paid (excluding extra loading) or the surrender value, whichever is higher, provided the policy is in force.

Term insurance pays the sum assured only on death during the policy term and carries no maturity benefit; endowment pays on survival or death; ULIPs allocate premium to units with NAV-based returns and a lock-in of 5 years.

Participating (with-profit) policies share surplus through bonuses: simple reversionary bonus vests annually, terminal bonus is paid at maturity or death, and interim bonus applies to claims in the year.

Section 41 of the Insurance Act, 1938 prohibits rebating: offering any inducement beyond the terms of the policy is an offence attracting penalty up to Rs.10 lakh.

Saral Jeevan Bima is a non-linked, non-participating, pure risk (term) individual life insurance product mandated by IRDAI for all life insurers, effective 1 January 2021.

Eligibility: entry age from 18 to 70 years (age at maturity up to 70 years) - the minimum entry age is 18 and maximum maturity age is 70; policy term is 5 to 40 years, chosen in whole years.

Sum assured: minimum Rs.5 lakh and maximum Rs.25 lakh; the maximum is subject to the insurer's underwriting policy and no sum assured is available below Rs.5 lakh.

Premium payment: single pay or regular pay (limited or regular premium) with modes yearly, half-yearly, quarterly and monthly; no riders are permitted under this product.

Death benefit is the absolute sum assured payable to the nominee; there is no maturity benefit, no surrender value and no paid-up value under this pure term plan.

Grace period is 30 days for monthly mode and 15 days for other modes; on non-payment within grace the policy lapses and is not revivable beyond the standard revival window.

Waiting period for suicide: 12 months from issue; death by suicide within 12 months returns 80% of premiums paid or surrender value, whichever is higher.

Free-look period of 15 days (30 days for distance marketing) applies; the insurer must refund premium less proportionate risk premium and expenses on cancellation.

Insurers must offer the product with simple, standard policy wording and cannot impose occupation, income or medical tests beyond their standard underwriting; the product is filed under the Use and File procedure.

IRDAI was constituted under the Insurance Regulatory and Development Authority Act, 1999, with its head office at Hyderabad; it replaced the Controller of Insurance.

Insurance Act, 1938: Section 45 limits repudiation for misrepresentation to 3 years; Section 64VA prescribes minimum solvency of 150% of required solvency margin.

Life insurers must maintain solvency margin of 150% of the required solvency margin under IRDAI (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2016.

IRDAI (Insurance Products) Regulations, 2024 govern product design, filing (Use and File or File and Use) and policyholder disclosure; product approval timelines are prescribed for each route.

IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2015 set the minimum paid-up equity capital for a life insurer at Rs.100 crore.

IRDAI (Insurance Advertisements and Disclosure) Regulations, 2000 require prior approval of advertisements and prohibit misleading claims; every advertisement must carry the insurer's registration number and a statement that insurance is the subject matter of solicitation.

IRDAI (Protection of Policyholders' Interests) Regulations, 2017 prescribe the proposal form content, 15-day free-look, grievance redressal and time limits for claim settlement.

The Insurance Ombudsman Rules, 2017 allow a complaint for claim value up to Rs.30 lakh, to be filed within one year of the insurer's rejection; the award must be accepted within 30 days.

Corporate agents and brokers are licensed by IRDAI; individual agents must hold a valid certificate of training and a licence issued under the Insurance Act, 1938.

Channels: individual agents, corporate agents, insurance brokers, bancassurance, direct marketing, web aggregators, insurance marketing firms (IMF) and point of sales persons (POSP).

An individual agent represents one life insurer and one general insurer at a time; a corporate agent may tie up with up to three life, three general and three health insurers.

IRDAI (Insurance Marketing Firms) Regulations, 2015 permit an IMF to distribute products of up to two life, two general and two health insurers through certified insurance marketing firms.

POSP is an individual appointed by an insurer, licensed under IRDAI (Point of Sales Persons) Guidelines, 2015, authorised to sell only pre-approved simple products (such as Saral Jeevan Bima) after passing the prescribed training and examination.

Commission and remuneration are governed by IRDAI (Payment of Commission) Regulations, 2023; commission rates are within the board-approved policy of the insurer and disclosed to policyholders.

An agent must disclose the commission earned on a policy to the prospect and must not rebate; violation of Section 41 of the Insurance Act, 1938 attracts penalty up to Rs.10 lakh.

Solicitation must follow the 'know your customer' and suitability norms; the agent must obtain the prospect's consent, complete the proposal truthfully and forward the premium within the prescribed time.

Web aggregators must display quotes from at least five insurers and disclose the commission earned; they cannot solicit or close a sale directly unless registered as a broker.

Agent duties: prospect identification, need analysis, proposal completion, premium collection and remittance, policy delivery, premium reminders and claim assistance to the nominee.

The agent holds a licence valid for three years from the date of issue, renewable on application with the prescribed fee and proof of training; a lapsed licence can be renewed within the renewal window on payment of a late fee.

Code of conduct under IRDAI (Appointment of Insurance Agents) Regulations, 2016: no misrepresentation, no rebating, no unauthorised premium retention, maintain confidentiality and disclose insurer identity.

Premium collected from a prospect must be deposited with the insurer within 24 hours (or the next working day) and a receipt must be issued; failure is a breach of the code of conduct.

Policyholder rights: free-look cancellation, grievance redressal through the insurer's Grievance Redressal Officer, then IRDAI's Bima Bharosa portal, then the Insurance Ombudsman.

The insurer must respond to a grievance within 14 days; if unresolved, the policyholder may approach the Ombudsman within one year of the insurer's reply or rejection.

Nomination under Section 39 of the Insurance Act, 1938 allows the policyholder to name a nominee; a beneficial nominee (spouse, children, parents) receives the benefit free of succession disputes.

Assignment under Section 38 transfers policy rights; a policy may be assigned absolutely or conditionally, and the insurer must register the notice of assignment.

Claims: the insurer must settle a claim within 30 days of receipt of all documents; where investigation is needed, within 45 days, and interest at 2% above the bank rate applies for delay beyond that.