Guidelines on Sharing of Information by IRDA

Faced with requests from various quarters seeking information about the insurance companies and other entities regulated by the IRDA, IRDA has, vide its circular dated December 8, 2010, published detailed guidelines on how it would be sharing information.

IRDA has categorized the information sought from it into three categories:

a) Information available in the public domain- such as returns and information filed with the IRDA under the disclosure guidelines prescribed by the IRDA, or information made available on the websites of the entities regulated by the IRDA.

b) Information not available in the public domain, which may include, (i) information which is considered confidential by the IRDA, or (ii) information which could impinge on the proprietary rights for commercial or other reasons.

c) Any other information.

Information in public domain

For information available in the public domain, the IRDA may either disclose the information or direct the person concerned to the website/ other source where the information is available.

Information not in public domain

The guidelines on sharing of such information is as follows:

a) Where information has been sought under Section 20 of the Insurance Act, the request should be examined to ensure that no information that can affect competition or stability of the company or the industry as a whole is shared. It may, however, be noted under Section 20 of the Insurance Act, the policyholder and the shareholders of an insurance company have the right to inspect and seek certified copies of the returns, statements, accounts, and memorandum and articles of association. Such details are normally available in public domain. The stipulation of the IRDA, therefore, should be read more as an statement made by way of abundant caution to prevent disclosure of proprietary information.

b) Where information is sought by domestic regulators (such as RBI, SEBI, PFRDA etc.), international supervisors and agencies, and public authorities, the IRDA will determine whether each request relates to a shareable information or not. The assessment on the shareability of the information not in public domain shall be made taking into account the following:

i. Reasons for the request.

ii. Nature of the information sought, and whether the information has proprietary value.

iii. Maintenance of confidentiality of the information sought.

iv. Reciprocity between the regulators and authorities making the request.

c) Where information has been sought by the public at large or under the Right to Information Act, 2005, the request shall be dealt with in accordance with the applicable legal framework. In accordance with the Right to Information Act, 2005 itself, access to commercial information that is confidential and may impinge on proprietary/ privacy rights may be denied.

Other information

The IRDA will consider each request on its merit, and may deny access to information when the information may impact the stability of its regulated entities, or when it may be mis-used by the competitors.

A. IRDA’s advisory on compliance with the orders of Insurance Ombudsman

Taking note of an order passed by the Delhi High Court, the IRDA has advised the insurance companies to take note of the observations made by the High Court to the following effect:

a) It is not open for the insurer to challenge the awards of insurance ombudsman.

b) The mechanism of adjudication by the insurance ombudsman is an alternate dispute redressal mechanism devised by insurers themselves, and the insurers have bound themselves unconditionally to honour such awards.

The IRDA has advised the insurance companies to review all the cases filed by them against the orders of Insurance Ombudsman in light of the High Court’s observation. IRDA has further asked the insurance companies to inform the IRDA of the final status of the cases filed against the orders of Insurance Ombudsman.

It may be noted that the above observations were made by the High Court of Delhi in the case of Vinay Kumar Aneja v. NIA (Order dated 09.09.2010 in W.P. No. 10638/06). The case related to non-renewal of a mediclaim policy by New India Assurance Company Limited after the assured had made multiple claims during the claim period on account of cancer treatment. In a complaint filed by the assured, the Insurance Ombudsman asked the insurance company to renew the mediclaim policy of the assured. The insurer renewed the policy but from a date subsequent to the order of the Ombudsman. Upon a clarification sought by the petitioner, the Insurance Ombudsman directed the insurer to collect the premium for the period starting from the date the policy lapsed and renew the policy from that date.

Before the High Court the insurer claimed primarily two defences, namely:

a) Under Section 64VB of the Insurance Act, 1938, ‘no risk can be assumed unless the premium is received in advance’.

b) Insurance Ombudsman could not have entertained claims in respect of non-renewal of mediclaim policies as they do not fall under any of the five categories of complaints that can be entertained by insurance ombudsman under the Redressal of Public Grievance Rules, 1998. The Ombudsman rejected the contentions of the insurance company and

The High Court rejected the contention of the insurer on the ground that it was too late for the insurer to have claimed those defences. Objections to the awards passed by the Insurance Ombudsman cannot be admitted when the award has been accepted by the insurer in the first place. Also, since the mechanism of the insurance ombudsman has been devised by the insurance companies, themselves, they should bind themselves to unconditionally honor the awards of the insurance ombudsman.