1 – Purpose
This Act aims to ensure transparency, fairness, and accessibility in insurance contracts, and to protect the rights of policyholders across all classes of insurance.
2 – Definitions
For the purpose of this Act:
(a) “Insurer” means any person or entity authorized to offer insurance coverage.
(b) “Policyholder” means a person who has entered into a contract of insurance.
(c) “Insurance Contract” means a legally binding agreement whereby an insurer undertakes to compensate the policyholder upon occurrence of certain events.
(d) “Claim” means a request made by the policyholder to the insurer for payment under the policy.
3 – Mandatory Disclosure Requirements
Insurers shall be required to:
(a) Provide clear, plain-language explanations of coverage and exclusions.
(b) Disclose total costs, fees, deductibles, and premium structures before a policy is purchased.
(c) Notify policyholders of any changes in terms at least 30 days in advance.
4 – Right to Cancel
(a) A policyholder shall have the right to cancel any new insurance policy within 14 days of purchase without penalty.
(b) Upon cancellation, all unused premiums shall be refunded in full, unless a claim has been made.
5 – Fair Claims Handling
Insurers must:
(a) Respond to all claims within 10 business days of receipt.
(b) Provide written justification for any claim denial.
(c) Complete claim investigations within 30 days, unless extended by written notice for just cause.
6 – Anti-Discrimination
No insurer may refuse to offer or renew coverage based on race, gender, age (within regulated bounds), disability, or genetic information, except as actuarially justified and approved by regulatory authorities.
7 – Regulatory Oversight
(a) The Insurance Regulatory Authority (IRA) shall be empowered to enforce this Act;
(b) The IRA shall have the authority to impose fines, revoke licenses, and conduct audits of insurers;
(c) Insurers must submit annual transparency and compliance reports.
8 – Penalties
Violations of this Act shall result in:
(a) Fines ranging from $5,000 to $500,000 per incident;
(b) Possible suspension or revocation of the insurer’s license for repeated violations.