Life Insurance Companies will have to provide details regarding their investments in rural as well as social sectors, thus regulating terms adhered by Insurance Regulatory and Development Authority of India (IRDA). The step was taken so as to manage and report numerous policies assumed within such sectors along with total percentage attributed to respective policies.
The written statement will help IRDA to regulate the checklist for at least 2 years so that appropriate obligations are attended after filing details. Insurance cos regulating social sector will have to enter mandatory particulars of a total number of lives covered under the social segment of the policy. On the other hand, insurance covered under rural sector have to be written in percentage form.
Irrespective of categories of insurance, an insurer, have to agree on terms and conditions regarding policy details thus providing an annual certificate by the Principal Officer or the CEO. According to the new rule book, an insurer ought to file minimum 7% of its total policies attained from rural sector from the very first year of business and later on keep it in a continuation mode after that. Also, it should gradually increase by 20% in its 10th year.
General and Health insurers need to file details of the premium amount acquired from the rural area thus comparing it from the gross premium. Moreover, they tend to provide specifications regarding their business on the social platform. The respective total premium ought to be 2% from the rural sector in the first tenure whereas increase by 7% by the 10th year.
Criteria for insurers belonging to social segment tend to follow particular terms and policies regulated under IRDA. The sector comprises of informal, unorganised, economically weak, socially backwards classes, including other categories of people dwelling in rural as well as urban areas.