The insurance companies are allowed to allot any of the lapsed ‘orphan’ life insurance policies to other individual insurance agents with valid licence for rendering effective service to the policyholders.
In the guidelines on servicing of orphan policies issued on Friday, the Insurance Regulatory and Development Authority said the life insurers should notify the particulars of the newly-allotted agent to the policyholders concerned.
All policy services will be rendered by the ‘allotee agent’ similar to what the insurance agent was rendering, the regulatory said.
Single premium life insurance policies or life insurance policies on which no further premiums are due for payment are not eligible for allotment under these guidelines.
Life insurance products designed with specific marketing features such as direct/online marketing where no commission outgo is projected are also not eligible for allotment.
The guidelines will come into force with immediate effect, IRDA said.
‘Orphan’ life insurance policies refer to the policies initially effected by an individual insurance agent whose services are subsequently terminated, removed or deleted from the rolls of the insurer.