IDRA mulls no fee for nomination change

Observing policyholders' right to effect changes in nomination, sectoral regulator IRDA is proposing to do away with the practice of charging fee for such alterations by life insurance companies.

The insurance Regulatory and Development Authority of India in a draft on 'Fee for Registering Cancellation or Change of Nomination by the Holder of a Policy of Life Insurance', has invited comments from stakeholders by February 2, 2015, according to a report in The Economic Times.

"On a comprehensive review…it may be observed that the holder of a policy of life insurance has a right for effecting a nomination and for registering such nomination for the first time be it at the time of effecting the policy of life insurance or at a later time, no fee shall be charged by the life insurers," said the exposure draft.

Presently, life insurance companies have to give a written acknowledgement about registering a nomination or a cancellation or change thereof and are allowed to charge fee for registering such cancellation or change.

The exposure draft also proposes for no registration fee for a nomination and furnishing a written acknowledgement.