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Date: 23-Jan-2024 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by sub section 1 of section 64 ULA of the Insurance Act

Issued by Insurance Regulatory And Development Authority · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The Insurance Regulatory and Development Authority of India (IRDAI) has de-notified the Arbitration clause in all tariff products under Fire, Motor and Engineering, Workmen’s Compensation, and other classes of insurance business.
  • This notification is issued in exercise of powers conferred by sub-section (1) of section 64 ULA of the Insurance Act, 1938.

Key Changes

  • Effective from October 27, 2023, the Arbitration clause related provisions in tariff general regulations, terms, conditions, clauses, warranties, policy, add-ons, endorsement wordings, and proposal forms applicable to insurance business risks governed by the erstwhile Tariffs are de-notified.
  • Notification Ref.034/IRDA/De-Tariff/Dec-06 dated 4th December 2006, which mandated the continuation of tariff general regulations (other than those relating to rating), terms, conditions, clauses, warranties, policy and endorsement wordings applicable to certain classes of business such as Fire, Engineering, Motor, Workmen’s Compensation and other classes of insurances which were then under tariffs shall continue to be followed until further orders.
  • Insurance risk contracts mentioning provisions regarding the Arbitration clause will be subject to circulars issued by the Authority and amended from time to time.

Impact Analysis

Insurers

  • Insurers will have greater flexibility in designing dispute resolution mechanisms, potentially leading to more efficient and cost-effective processes.

Policyholders

  • The change may impact the speed and cost of resolving disputes, depending on the alternative mechanisms adopted by insurers.

IRDAI

  • IRDAI will have to ensure fair treatment of policyholders in the absence of a standard arbitration clause.

Suggested Action Items

  • Stay updated on circulars and guidelines issued by IRDAI regarding dispute resolution.

Key Entities Referenced

IRDAI: Insurance Regulatory and Development Authority of India, the regulatory body for the insurance sector in India. Insurance Act, 1938: The primary legislation governing the insurance industry in India. Section 64 ULA provides powers to the Authority. IRDA Act, 1999: The Act that established the IRDAI. Section 14 outlines the powers and functions of the Authority. Tariff Advisory Committee: A committee that was previously involved in setting tariffs for certain classes of insurance business.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-टी.एल.-अ.-23012024-251560 xxxGIDHxxx CG-TL-E-23012024-251560 xxxGIDExxx असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 53] िई ददल्ली, मगं लिार, िििरी 23, 2024/माघ 3, 1945 No. 53] NEW DELHI, TUESDAY, JANUARY 23, 2024/MAGHA 3, 1945 भारतीय बीमा जिजियामक और जिकास प्राजधकरण अजधसचू िा हदै राबाद, 22 िििरी, 2024 फा. स.ंभाबीजिजिप्रा/ साधारण बीमा/प्रिल्ु क /1/195/2024.– बीमा अजधजियम, 1938 की धारा 64 यूएलए की उप-धारा (1) द्वारा प्रदत्त िजियों का प्रयोग करत े हुए, प्राजधकरण इसके द्वारा अजि, मोटर और इंिीजियररंग, कामगार प्रजतकर और बीमा व्यिसाय के अन्य िगों के अंतगगत सभी प्रिुल्क उत्पादों म ें जििाचि खंड की अजधसूचिा को जिरस्ट्त करता ह।ै 1. िर्ग 2006 म,ें प्रिुल्क सलाहकार सजमजत द्वारा प्रिुल्कों के प्रत्याहरण के अिुसरण म,ें भारतीय बीमा जिजियामक और जिकास प्राजधकरण (“प्राजधकरण”) आईआरडीए अजधजियम, 1999 की धारा 14 की उप-धारा (2) के खंड (i) के अंतगतग अपिे म ें जिजहत िजियों का प्रयोग करत े हुए, अजधसूचिा संदभग 034/आईआरडीए/डी-टैररफ/ददसंबर-06 ददिांक 4 ददसंबर 2006 िारी की, जिसम ें यह अजधसूजचत दकया गया दक व्यिसाय के कुछ िगों िैसे अजि, इंिीजियररंग, मोटर, कामगार प्रजतकर तथा बीमाओं के अन्य िगों के जलए लाग ू प्रिल्ु क (टैररफ) संबंधी सामान्य जिजियम (रेरटंग स े संबंजधत को छोड़कर अन्य), ित,ें जिबंधि, खंड, िारंरटयााँ, पाजलसी और पृष्ांकि िब्दािली/ िाक्यरचिा िो उस समय प्रिुल्कों के अधीि थीं, का पालि करिा अगल ेआदेिों तक िारी रहगे ा। 2. अब बीमा अजधजियम, 1938 की धारा 64 यूएलए की उप-धारा (1) के अंतगगत प्राजधकरण के पास जिजहत िजियों के आधार पर प्राजधकरण इसके द्वारा अजधसूजचत करता ह ै दक पूिग के प्रिल्ु कों के द्वारा जियंजित बीमा व्यिसाय के िोजखमों के जलए लागू प्रिल्ु क संबंधी सामान्य जिजियमों, ितों, जिबंधिों, खंडों, िारंरटयों, पाजलसी, ऐड-आिों, 504 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] पृष्ांकि संबंधी िब्दािली/िाक्यरचिा और प्रस्ट्ताि फाम ग म ें जििाचि खंड संबंधी उपबंधों की अजधसूचिा 27 अिूबर 2023 स े प्रभािी रूप में जिरस्ट्त की गई ह।ै 3. तदिुसार, इसके द्वारा यह अजधसूजचत दकया िाता ह ै दक 27 अिूबर 2023 से जििाचि खंड के संबंध म ें बीमा िोजखम संजिदाओं के उल्लेख स े युि उपबंध प्राजधकरण द्वारा इस संबंध म ें िारी दकय े गय े समय-समय पर यथासंिोजधत पररपि के अधीि होगा। देबािीर् पण्डा, अध्यक्ष [जिज्ञापि-III/4/असा./707/2023-24] INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA NOTIFICATION Hyderabad, 22nd January, 2024 F. No. IRDAI/Gen Insurance/Tariff/1/195/2024.—In exercise of the powers conferred by sub section (1) of section 64 ULA of the Insurance Act, 1938, the Authority hereby de-notifies the Arbitration clause in all tariff products under Fire, Motor and Engineering, Workmen’s Compensation and other classes of insurance business. 1. In the year 2006, pursuant to the withdrawal of tariffs by the Tariff Advisory Committee, the Insurance Regulatory and Development Authority of India (“Authority”) in exercise of powers vested in it under clause (i) of sub section (2) of Section 14 of the IRDA Act, 1999, issued notification Ref.034/IRDA/De-Tariff/Dec-06 dated 4th December, 2006, wherein it was notified that the tariff general regulations (other than those relating to rating), terms, conditions, clauses, warranties, policy and endorsement wordings applicable to certain classes of business such as Fire, Engineering, Motor, Workmen’s Compensation and other classes of insurances which were then under tariffs shall continue to be followed until further orders. 2. Now, by virtue of powers vested with the Authority under sub section (1) of Section 64 ULA of the Insurance Act,1938 the Authority hereby notifies that the Arbitration clause related provisions in the tariff general regulations, terms, conditions, clauses, warranties, policy, add-ons, endorsement wordings and proposal form applicable to the risks of insurance business governed by the erstwhile Tariffs stand de-notified with effect from 27th October, 2023. 3. Accordingly, it is hereby notified that with effect from 27th October, 2023, insurance risks contracts mentioned provision regarding Arbitration clause shall be subject to the circular issued in this regard by the Authority and amended from time to time. DEBASISH PANDA, Chairperson [ADVT.-III/4/Exty./707/2023-24] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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