Section 3 in The Insurance Regulatory And Development Authority (Protection Of Policy-Holders' Interests) Regulations, 2002
3. Point of sale
.- [(1) Notwithstanding anything mentioned in regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with profits) or non-participating (without profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case, the premium relatable to health related or critical illness riders in the case of term or group products shall exceed 100% of premium under the basic product. All other riders put together shall be subject to a ceiling of 30 per cent. of the premium of the basic product. Any benefit arising under each of the riders shall not exceed the sum assured under the basic product:Provided that the benefit amount under riders shall be subject to section 2(11) of the Insurance Act, 1938.Explanation .-The rider or riders attached to a life policy shall bear the nature and character of the main policy, viz ., participating or non-participating and accordingly the life insurer shall make provisions, etc., in its books.] [ Substituted by Notification No. IRDA/Reg./10/2002, dated 16.10.2002, dated 16.10.2002 (w.e.f. 16.10.2002).](2)An insurer or its agent or other intermediary shall provide all material information in respect of a proposed cover to the prospect to enable the prospect to decide on the best cover that would be in his or her interest(3)Where the prospect depends upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately.(4)Where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the end of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract.(5)In the process of sale, the insurer or its agent or any intermediary shall act according to the code of conduct prescribed by-(i)the Authority;(ii)the Councils that have been established under section 64-C of the Act, and(iii)the recognized professional body or association of which the agent or intermediary or insurance intermediary is a member.
