New Delhi | Regulator Irdai on Thursday set up a committee to simplify the wording of insurance policies to help people make an informed decision before buying cover.
The eight-member committee has been asked to submit its recommendations within 8-10 weeks.
In a circular, the Insurance Regulatory and Development Authority of India (Irdai) said policyholders often find it difficult to comprehend the terms and conditions in insurance policy contracts because of the complexity of the language used.
This causes confusion among policyholders while purchasing an insurance policy, Irdai said in an office order on 'Committee for Plain Language for Policy Wordings'.
"Irdai is committed to insurance for all 2047 to attain this objective, efforts are being made towards creating a progressive, supportive, facilitative and forward-looking regulatory architecture to foster a conducive and competitive environment leading to wider choice, accessibility and affordability to policyholders," it said.
The panel has been asked to examine the existing insurance policy wording and suggest "simple and plain" wording that is legally correct and enforceable.
"Suggest simple policy wordings that clearly specify obligations and responsibilities of each of the parties to the contract" is also one of the terms of reference given to the panel.
It has also been asked to suggest specifications like typefaces for written material and presentation thereof, for both print/electronic records that are easily readable and comprehendible.