IRDAI POSP Life flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable interest

A financial or legal relationship by which the policyholder benefits from the continued life of the insured or suffers loss on death. In life insurance it must exist at proposal, not at death.

Utmost good faith

The mutual duty of proposer and insurer to disclose all material facts fully and accurately. Breach by the proposer allows repudiation within three years of issue or revival under Section 45.

Free-look period

A window allowing the policyholder to cancel a new policy and receive a refund. It is 15 days from receipt of the document, extended to 30 days for distance marketing and electronic policies.

Grace period

Extra time allowed after the due date for paying premium while cover continues. It is 30 days for monthly mode and 15 days for yearly, half-yearly and quarterly modes.

Revival of lapsed policy

Restoration of a lapsed policy by paying arrears with interest and giving evidence of continued insurability. It is normally available within five years of the first unpaid premium.

Suicide exclusion clause

If the insured dies by suicide within 12 months of issue or revival, the nominee receives 80% of premiums paid excluding extra loading, or the surrender value, whichever is higher.

Simple reversionary bonus

A with-profit bonus declared annually as a percentage of the sum assured, vesting each year and payable with the claim. It does not itself earn further bonus.

Section 41 rebating

A provision of the Insurance Act, 1938 prohibiting an agent or insurer from offering any inducement outside policy terms. Violation attracts a penalty of up to ten lakh rupees.

Saral Jeevan Bima nature

A non-linked, non-participating, pure term individual life product that every life insurer must offer, mandated by IRDAI and effective from 1 January 2021.

Saral Jeevan Bima sum assured

The standard product permits a minimum sum assured of five lakh rupees and a maximum of twenty-five lakh rupees, subject to the insurer's underwriting policy and rules.

Saral Jeevan Bima entry age

The minimum entry age is 18 years and the maximum age at maturity is 70 years, with policy terms selectable between 5 and 40 years in whole years.

Saral Jeevan Bima death benefit

The absolute sum assured is paid to the nominee on death of the insured during the term. There is no maturity benefit, surrender value or paid-up value.

Saral Jeevan Bima riders

No riders may be attached to this standard product, and it must carry simple standardised wording that insurers cannot vary beyond permitted parameters.

Saral Jeevan Bima premium modes

Premium may be paid as single, limited or regular premium, through yearly, half-yearly, quarterly or monthly modes, with grace of 15 or 30 days by mode.

IRDAI Act 1999

The statute that created the Insurance Regulatory and Development Authority as the sector regulator, with its head office at Hyderabad, replacing the Controller of Insurance.

Solvency margin requirement

A life insurer must maintain assets exceeding liabilities by at least 150% of the required solvency margin, as prescribed under the applicable IRDAI solvency regulations.

Minimum paid-up capital

A life insurer must have minimum paid-up equity capital of one hundred crore rupees at registration, under the IRDAI registration and capital structure regulations.

Section 45 Insurance Act

After three years from issue or revival, a policy cannot be repudiated for misrepresentation or non-disclosure. Within that period, repudiation requires proof of fraudulent suppression.

Use and File route

A product filing route where the insurer may launch the product immediately after filing with IRDAI, which retains power to require modifications within the prescribed period.

Insurance Ombudsman limit

An ombudsman may consider complaints where the claim value does not exceed thirty lakh rupees, filed within one year of the insurer's rejection or no reply.

Advertisement disclosure rule

Insurance advertisements must be truthful, carry the insurer's registration number, and state that insurance is the subject matter of solicitation; misleading claims are prohibited.

Individual agent tie-up rule

An individual agent may represent one life insurer and one general insurer at a time. Representing more than this without licence conditions breaches the appointment regulations.

Corporate agent tie-ups

A corporate agent may hold agency arrangements with up to three life insurers, three general insurers and three health insurers, subject to IRDAI conditions.

Point of Sales Person

A person appointed by an insurer and certified under IRDAI POSP guidelines to sell only pre-approved simple products, such as standard term plans, after training and examination.

Insurance Marketing Firm

An entity registered under IRDAI IMF regulations that distributes products of up to two life, two general and two health insurers through certified insurance marketing firm personnel.

Web aggregator duties

An IRDAI-registered website that displays insurance quotes from at least five insurers, discloses commission earned, and cannot close a sale unless registered as a broker.

Commission disclosure

The agent must disclose the commission payable on a policy to the prospect and must never share it as an inducement, since rebating is an offence under Section 41.

Agent licence validity

An agent licence remains valid for three years from issue and is renewable with the prescribed fee and training evidence; a lapsed licence may be renewed with a late fee.

Premium remittance duty

An agent must deposit premium collected from a prospect with the insurer within 24 hours or the next working day and issue a receipt; retention breaches the code of conduct.

Grievance redressal escalation

A policyholder first approaches the insurer's Grievance Redressal Officer, then IRDAI's Bima Bharosa portal, and finally the Insurance Ombudsman if unresolved.

Section 39 nomination

A policyholder may nominate a person to receive the policy money on death. A beneficial nominee such as spouse, children or parents receives it free of succession disputes.

Section 38 assignment

Assignment transfers the rights of the policy to another person, absolutely or conditionally, and the insurer must register the notice of assignment in its records.