IRDA seeks greater clarity in non-life insurance offers

The Insurance Regulatory Authority of India (IRDA) has called for more clarity in policy documents in non-life insurance schemes, pointing particularly to health insurance. This accounts for a third of consumer complaints, although in terms of clients its base is small even in the non-life insurance sector.

 ''If one-third of complaints are from the health side, I will conclude that the nature of communication on health insurance policies and the understanding of the policy by the consumer are areas of concern. Probably, the lack of clarity is reflected in the increasing number of complaints,'' IRDA chairman J Harinarayan said in Hyderabad on Thursday.

Speaking at the first meeting of the newly-formed Health Insurance Forum, Harinarayan said IRDA had received 92,898 complaints in the non-life sector to date, of which 38,891 or 37.48 per cent were with regard to health insurance.

Harinarayan said the language used in policy documents is often opaque. ''Probably the lack of clarity in communication is reflected in the form of an increasing number of complaints. Good communication is the responsibility of the insurance company and not of the policy holder. An insurance policy, as a contingent contract, has to be specific and unambiguous,'' he said.

Among other things, he pointed to the Contract Act of 1872 under the British Raj, which specifies consensus between parties of a given contract and is categorical that the understanding of the terms needs to be balanced.

''Even in England, they have changed the structure of the language. What we use here has little resemblance to the language used in the UK.