The Insurance Regulatory and Development Authority of India (IRDAI) has announced the de-notification of the Arbitration clause for all tariff products, including Fire, Motor, Engineering, and Workmen’s Compensation.
Announced in a letter published by Debasish Panda, Chairperson of the IRDAI, on Monday, 22 January, the regulator said the de-notification applied to tariff-related insurance contracts dated from 27 October 2023.
The change marks a departure from the provisions in place since Dec 2006. The Arbitration clause has provided a mechanism for resolving disputes between insurers and policyholders outside the court system. With its removal, these disputes will no longer be resolved under the specific Arbitration provisions set out in the tariff regulations.
This shift suggests a move towards a more flexible regulatory environment in the insurance sector, providing the potential for different processes of dispute resolution as the market evolves.
The IRDAI said the Arbitration clause and related provisions within general regulations, terms, conditions, clauses, warranties, policy, add-ons, endorsement wordings, and proposal forms, applicable to the risks of insurance business, had all been de-notified.
The IRDAI is likely to provide further details and implications of this de-notification in subsequent circulars.
