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3Itill"l: 1'ttI'll EX':Ji"RA.ORII1INARV '~m-"IDQlj 4

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of ~n

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TllE··GAZf.TfE OF n..nLlI,. _ EXTRAQRf)!NARY

fi'l(SURANCf. REGUl ATORY AN n nEw.l.jJPIVIE~T Aml:JOamr NifIlFlc.mON

Hydcr.ab<ld.l.be toll:! l'vrwembc •. 2005

F, No .. BID.iVi.\UJ3f2005:-fu exercise of the powers conferred by Section }!4A of tlic Insurance .Ad, j sua (4 oj 193,)) read wah Sectum 16 of the Insurance Re:gIllrNfH}! l.md Development AHlhonOI Act', 1999 (4j rJ 1999;), the .Authority. in consuiuuion l\·ith the insurance Advisory Commiuee. her~by mukes rfut following regulations, nameiy.»

Short title and c(mu}lcneemeut.- (1) These. regulations, may be called. the Insurance Regulatory and Development A uthority (Micro-insurance) Regula[ion~·l 2005 ..

(2) They shall corne into force from the date of their publication in the Official Gazette.

2.Ue.l:luidons.- In these regulations, unless the context requires otherwise-

(a) "AcC- means the Insurance Act. 1938 (4 of ]9381

(b) "Authority" means tile Insurance Regulatory and Development Authority

established under sub-section (1) of section 3 Of the Insurance Regulatory and Development Authority Act, ] 999 (4 I ofI 999):

(c) "family' means a unlt comprising of husband, wife, dependant parents and a maximum of three children.

Provided that where the number of children is marc than three, for construing the composition of family as aforesaid, the first three childrenshall be included,

Provided further that an insurer may. within the aforesaid, parameters laid down for the: composition ofthe family, define "family' as per the requirements of the individual or group,

(d) "general micro-insurance product" means any health Insurance contract, any contract covering the belongings, such as. hut, livestock or tools or instruments or any personal accjdent contract, either on individual or group basis, as per tenus stated in Schedule-I appended to these regulatlons;

(e) "life micro-insnrance product" means 3:[1), term insnranee'emuract with or without return of premium, any cadowmem jnsurance contract .or health insurance contract, with or without an accident benefit rider, either an individual Or group basis, as per terms stated in Schedule-IT appended to these regulations;

(1) "micro-insurance agent" meana- 0) 11 Nea-Gcvemmear Orgaoisation C,GO); or (ii) a Self Help Group (SHG); :or (iii) a fiero-Finance Institution (MFI), WJ10 is appointed by an insurer to act as a micro-msurance agent for distributien of micro-insurance products.

Rxph;UUJ!iOl1:- For the purposes of these regulaiiona-

(I). Non-Government Orgw!isruh;m (NGD) means a non-profit organization registered as a society under a.ny '~aw~and has been, workingat least for three years with marginalized groups, with proven track record, clearly stated aims .and o bj ectives, transparency, and accountabil i ty as outlined in its rnernoran d 1..11'11 > rules, by-laws or regulations; as. the case may be, and demenstrates involve men l. ofeommined people.

(11) Self Help Group (SHG) means any informal g;r:oup c()nsisti~ng of ten to twenty or more persons and has been working 3i{ least for throe yearS with ruarginalizcd groups \~11h proven track record, clearly stated aims and objectives, transparency, and accountabilityas outlined in its memorandum, rules, by-laws or regularions, as the case may be. and demonstrates, involvement of committed people.

(TIl) A4ic.ro.Pimmc;e Institutio» means any institution or entity or association registered under any law tor the registration of societies or co-operative societies, as the.case may be. inte:falia, for saneticning loan/finance to its members.

(g) "micro-insurance poii[':y" means an insurance policy sold under aplan which has been specifically approved by the Authority as a micra-insurance-product;

(tl) "micra-insurance product" includes a general micro-insurance jnoduct or H fc insirmncc product, proposal form and all marketing materials in respect thereof

(il all words and expressions used herein arrd not defined but defined In the lnsurunee Act, 1935 (4 of 1938), or in the Insurance Reguhrlory a..Jld Development Authoruy ACl, 19:99 (41 of 1999J or in any Rules or Regulations made mere tmd~r shall have the meanings rcspccuvely assigned If'" 'l",'nl in those AC1S or Rules or Rcgnhdions.

3. Tie-up between life insurer and non-life lusurer> (1) An insurer carrying on lifl: ursurancc business may offer life micro-rusurance products as also. general micro .1l·suraJ rce products, as proviucd herein.

PW\ uled that where .01." insurer carrymg: Oil 1i fc insurance bUSI uesso ff~~r~ <my gcm:nlr micro-insurance product, he shall !UI\C ~[ tie-up with all insurer carrying on general lnsuranee busi ness for this purpose, ~111d subject to the provisions of section 64 VB o f lhe . .. \ct. she r ruiui urn Rttributahle 1.0 the general micro insurance product may be collected fromthe prospect (proposer) by the insurer carrying On life insurance business, either ~HreC"t1y or through any of the distrrbming entities of' jnicro-insacance products as

3, .i.li 6- (~I I c.':.;; _. 2)

I

10

11IE Gl\lEITP" OF f}.lJJIA. EXITl:AORDINAR

::;peciiled in regulation 4,. and made over to t! I";: Insurer c:~rrY;llg on g.~f)LU I i IlStlr;Llln: b siness,

Provided turther lh-flt in the event of <my claim in regard to general JnICrIJ'111SW'<1I1~l' products, the insurer carrying OJ1 life insurance business 0] the. tllsli"ibulil'lg ·nlir.ics \.,f micro-insurance products, as the case may be; as may be sped fled ill tho tic-up referred to in thefirst proviso shall forward the claim to the insurer carrying on general insurance 'business and offer all assistance for the expeditious disposal of the claim,

{2j An insurer carrying on general insurance business may 0 ITer genera! nucrn-tnsurance products as also life micro-insurance products, as provided herein.

Provided that where an insurer carrying on general insurance business offers ~my life micro-insurance product, he shall have a lie-up with an insurer carrying on life insurance business for this purpose, and subject to the provisions of section MVB of the Act, the premium attributable to n life micro insurance product ma- be collected from the prospect (proposer) by the insurer carrying on .general i nsurance business, ei ther directly or through any of the distributing entities of micro-insurance products as speei fled. in regulation 4, and made over to the insurer carrying 011 life insurance business ..

Provider) further that in the event of any claim in regard 1.0. life mlcro-insurance products, the insurer carrying on general insurance business or the. distriburing entities of microinsurance producls, as the case may be, as may be specified in thetie-up referred to 1U the first proviso; shall forward the claim to the insurer carrying on life insurancebusiness and

offer all assistance for the expeditious disposal of the claim, '

4. Distributlcn ,of mic.ro,-iusurIllHce products.- In addition to an insurance agent or corporate agent or broker licensed under the Act, read wi th the regulations concerned made by the Authority for licensing of individual or corporate agents, or l nsuranco brokers, as the case ITlay be micro-insurance products may be distributed 1hH-'\'!~;~,!' the micro-insurance agents,

Provided thata micro-insurance agent shall not djslrihutc any product other Ilt'lI1 " micro - insuranc e prod L1C t,

;5. Appelntment of micro-lnsurance .~gel!ll .- 0) A micro-insurance agent shall b~ appointed by an Insurer by cnteringiuto a deed of agr ernent, which shall clearly speci fy the terms and condi lions of such appoi utment J i 11 ell! ding the d u h es and res pons i b ilit i es 0 r both the micrc-insurance agent and the insurer.

Prot~ided that before entering into .every such agreement, the same shan be g,N approved by the head office o the insurer,

(2) /\ micro-insurance rtt!,cnt shall not \' . -ork fer more II tall I}JlC insurer c.arrY[!l~ (H- tJ Je insurance business and one insurer ca rying on gGl1 . ral insurance bUStJ:tCSL

(3) The deed ofagrcemeni referred '[0 in sub-regularicn ~ 1) shall specifically authcriac the. micro-insurance. .uaent to. perform one Of more of 1111..: foHowin!! additional iunrtiens

~ . ~

narnclv:

u

a) collection of p;ropo~;;Il fo mrs;

b) collection of self declaration from the propi:.U;eT that he/she is in good

health;

c) oollecti on and remittanc e 0 r premium;

d) d istrib uri on of po l icy docnmcn ts;

c.) maintenance of register 0 all those insured and their dependants covered under the micro-insurance scheme, together with details of'narne, sex. age, address, nominees and thumb impression! signature of tile policyholder:

f) assistance in file settlement ofclaims;

g) ensuring aomination ~CI be made b y the insured;

h) any policy administration service.

(4) The micro-insurance agent or the insurershall have the opticn 10 terminate the agreement referred to in. sub-regulanon "I J. after glVIlJg a nonce of three months by the party intending to terminate the agreement.

Provided that no such notice shall be necessary, where the termination is on account of any misconduct or indiscipline or fraud cornmined by the micro-insurance agent.

(\'.. Empleyrnent of SrH.~c:m,cd person by micre-insuran II agents> .1\, micra-insurance agent shall employ specified persons with the prior approval of the insurer Ior the purpose of discharging all or any of the Iuncrions slated til sub-regulation (3) of regulation 5.

Provided that corporate agents and insurance brokers procuring micro-insurance business shall continue to be governed by the insurance: Regulatory and Development Authority (Licencing of Corporate Agents) Regll.1mion5, 20m, and insurance Rcgtdalory and Development Authority (Insurance Brokers l Regulations, 2002. M the case may D!.!.

7. Code of cnnd uct of MIcro irnsl.l rlHIICe agelfl.[s.- (j ) Every miero-msurance agcnt and specified person employed hy him shalt abide by the code. of conduct as laid dnwn jn Regulation 8 ,01' [he Insurance Regulatory and Development Authorny (Licensing or Insurance Agents) Reg ulati ons, 2000> and the relevant provisions of Insurance Regulatory and Development Authority l [ns\.l anC~ Advertisements and Disclosure) Regulations, 2000.

Provided thai nu; insurer shall ensure. compli ancc or the cede of conduct, ad vcn H;CnlCrH~ and disclosure norms by every micro-insurance agent

(2) Any vic lation by a mrcru-insurance agent of the code of conduct and/or • dvcruscrnent Or disclosure norms as aforesaid shall lead ill termination of his appointment. in .1ddhiol1 1u penal eonS')"CjIJCTICC5 for breach of code (J t conduct and/or advcruscmcnt 01 disclosure norms pursuan io the provisions of sub-rcgulanon ll).

~. Fil en ~ nf mtern-insu rancr p rudu N de::.ign,- ~ l) Every insurer shall be subject IO the "i;:'J and IJ~L;" procedure \~ ith 1'c;~;pCd t., f;' ug of mil" II-ill ntrancc pn~d~!(:L~ will' lh·,: _\ ":!ll'1 ;IY

THE GAZElTE OF INDIA: cX'mA01IDIN'ARY

(2) Every micro-insurance product which is cleared by the AUlhority for [he purpose of micro insurance shan prominemly carry the caption "1\1 icrn Insurance rroutI('I"

'9. Issuance of rniero-Insurauee policy contracts> (1, Every insurer shall Issue insurance contracts to the individual micro-insurance po!icy!mld:el's in [ht: vcrnucnlur language which is simple and e<I:>ily understood by lilt policyholders.

Provided that where issuance of policy contracts in the vereacul: r hmguage is not possible, the insurer shall as far as possible issue a detailed write-up about the policy de'tafJ.s in the-vernacular language.

(2) Every insurer shall issue insurance contracts to the grmlp micro-msurance policyholder in an unalterable form along with ;1. chedule showing the details of individuals covered under the group. and also JSSUC a separate certi ficate, lo eacb such individual evidencing proof of insurance, cOl11ai,ning details or vululity PUIlOt! oj cover. name of the nominee, and addresses of the underwriting office and theservicing offlce, 'where both ofllc;.e;s are not the same.

10. Uuderwrit.ing. - No insurer shall authorize any micro-insurance agent or im)' other outsider ro underwrite any insurance proposal for the purpose of granting insurance cover.

I I, Ca.pm.dt}' BJi'lHd.hl.g: .~. Every insurer shall imp,art at least twenty-five hours or training atits expense and through its designated offi.cer(s) ]11 the local vernacular language to all mi ere- insurance agents and the} r spec i fi ed pc rSOl1S in the, areas 0 f ins urauce sc I, H n g" poJicyhc)tdcr servicing and claims admimstration.

l2. Rcn1!u,D,erationl commissioa- (1) A micro-insurance agent Inay be paid, remuneration for all the functions rendered as outlined In regulation 5, and including cornrnissinn, by an insurer, and that the same sha]! not exceed the lirmts as s{al(:d below:

Single Premium policies Non single premium policies

- Ten per-c, nt of the single premium

.~ Tweuly per cent oftlee premiumfor all r/rt,'. ye,mJ of the premium paymg term

(2) Where the: agreement between the micro-insarancc agent and insurer 1 s terminated lor any reason whatsoever, no future commission! remuncrmion shall be: payable.

(3) For group insurance products, the insurer may decide the commission subject to, the overall limit as specified in sub-regulation (1).

I

13. Overall c·ompUan.ce.- Every insurer shall ensure that all transactions in counection

with mlcro-insurance business are In accordance with the previsions of tile' Act the Insurance Regulatory and. Development Act, (41 of ! 999), and the rules and regulations

made there under. .

[~m-~4]

14. Sl'!lbmLss~olil 'of illforu1:a:tion.- Every insurer shall furnish ]ufOrrml!110n in respect of mierti-insurance business in such fenn and manner andqoIli.t~1.nrng suchpruti.culars,as maybe required by the Authority from time to time,

(5. ObHgaUohS to R'U.f'.~d mlld Sod,al Secrtol'S.- U) All micro-il:llsur<mc~ policies may be reckoned fOF the purposes.of f.Ulfillment of social obligations by an. insurer pursuant to the provisions of'the Act and the. reguletions made there under ..

(2) Where Oil micro-insurance policy is issued in a rural area and falts under the definition of social 'sector, such p'oUcy may be reckoned for bothunder rural and social (i.blig,aticms sep:().rately.

16. HaQdUng of c.ompl:llwtsl g:~·iew,aDces.- (1) It sh¥]~. be the resp611~ib!Hry ofthe insurer [0 handle and dispose of complaints against a miero-insurance agent witt speed and prompti tude.

(i) Every insurer shall send a q uarterl y report to the Authority regard in g the handling o f cemplaints/grievances against the micro-insurance agents and 'where in a particular q uarter t there are no ~omp 1 ai.m!i:lgri ev anc es, a "N i 1" report shall be s ent,

17. Inspection by Authority.- The AuthoYity may cause inspection .of the office and. records of'any micro ~ insurance ag:ft!llt at any [iIne,] f it is deem ed necessary,

1 S. RJ~]ngval of dffficn.IUes.- Where any doubt or difficulty arises in gh'lng effect to the. ptevisicnsany of these regulations, the same may be referred LO the Authority. whose decision thereon shall bebinding on the parties concerned.

SdU:ldult-l.

fSee rcguh~.10n 2(d)1

lt~. s.aoo

M:;tK. Amount C[)VC[

Term of Term or Mi.ll. A~e (If Co~'"Cr Cove, In cntrv

MilL ~\ifu_

--_ -_. --

J y("ar 1 year N j\

he

gs,5.uOn

Per .1I"Sse:t'

COYer

K~. 30,000

Dwc lhn ~ & comcnts, n~ u\'e$!Q(.k or Toels Or un"plem~ms or Dt~!:t [ named ..;IsseIs. I o,r Crop ursuraac e <lg.,"I1.11 s! <l n peri b

----~---+-----+-----~----+-H~.l [til lnsurancc Coatract

(llltj,)

Min. Am.oul:I~ or Cu ... ~r

Hf'i, J(),OOO

--- ----~-----

I year lusun-rs' diAc-:n~tjnfl

MIIi:-l_ 0g~ I :;Jil efillry j

m

Vcr :m:w:~'

CU\'€I

Note:- 7Yw mimmurn number o_fmembcrs compnsmg (J f!,t-OUe shall be at least H1.'C'Hl\ {or gnmp ntsurance,

3~C;(, (;i!r,<; -l;

14

THE GAZh-r1'E DE INDIA: EXTR.AORDINARY

S-;.ilCGliJe-H [See regulation 2( I!)J

Type of Cover M inimum MllximLHll Temi of T.::m\ of Mi.flimm'll Maxi'[l~ulu
AnwUIilt of Amount of Cover CoveT" age al .age· at ·entry
Covet Cover )'I..rin. Max, I ·c:ntry
Term Insnrance Rs., 5.000 Rs. SO!OOO 5 year 115 ye." 1'8 co
with or without
return of premj urn
Endowment R£ .. 5;.oOO ·R!'>. JO,OOO 5ye;w r5 years Hi 60
insurance
Health Insurance Rs ,5,000 ib.30.000 ] year 7.J"ltill' Insurer's Insurer's
Contract djsc:reliol) discretion
(I11dividl.lal)
Health Insurance R.s JO,UOO Rs 3D 000 I 1 YI.::lr 7 year Insurer's Insurer" s
Contrac l(f.amil v)- discretion disereticn
I- id . fi Rs. ]0.000 R~, 50,000 j y~'[lr 1 S yoars 18 60
Acci ent Bene It as
rider Notes: J. Group insaronce prOdllr:!.,; Inny be renewable on (1 yearly basi.'

2, Trw minimum number o( meinbers camprisiug. a group sball he 111 least rwen.;_)' [or group insurance.

c. S. MO. Cii.mmarl IAD'vTlJl(N/I61f200SJE"tly.I

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