GUIDELINES FOR CHARGING FEE FROM HOLDER OF A POLICY OF LIFE INSURANCE FOR REGISTERING CANCELLATION OR CHANGE OF NOMINATION
CIRCULAR NO.IRDA/LIFE/CIR/GDL/058/03/2015, DATED 31-3-2015
Section 39(1) of the Insurance Act allows that the holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death. Section 39(2) allows such nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement as prescribed therein. Section 39(3) mandates that every life insurer shall furnish a written acknowledgement of having registered a nomination or a cancellation or change thereof and may charge such fee as may be specified by Regulations for registering such cancellation or change. Therefore, pending notification of the Regulations, the following guidelines are issued.
1. Every Life Insurer is permitted to collect the following fee for registering the cancellation or change of the nomination by the holder of a policy of Life Insurance on his own life.
|(a)||In respect of those policies that are issued in electronic form as specified by the regulations under the provisions of section 14 (2) of the Act, the fee collected shall not exceed Rs. 50 (Rupees fifty only) inclusive of all applicable taxes.|
|(b)||In respect of policies other than those referred under clause (1)(a) above, the fee collected shall not exceed Rs. 100 (Rupees Hundred Only) inclusive of all applicable taxes.|
2. No fee, other than what has been prescribed in Clause – 1 above, shall be collected for registering a nomination either at the time of effecting a policy of life insurance or at any time thereafter or towards any other services relating to nomination contained in section 39 of the Act.
3. The nomination effected by a policyholder at the inception of the policy through the proposal form and recorded by the Insurer on the face of a policy document shall be considered as a valid acknowledgement by the Insurer.
These Guidelines are effective from 1st April, 2015 and are issued under section 14(2) of IRDA Act, 1999.