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Industry Specific - Insurance Central Insurance Regulatory Development Authority Insurance Act, 1938

Amendment of Arbitration Clause in General Insurance policies

27-Oct-2023 | IRDAI/NL/CIR/MISC/188/10/2023

Insurance Regulatory and Development Authority has issued a Circular amending the Arbitration Clause in General Insurance policies, effective from 27th October 2023. The key highlights are: 1. Retail Lines of Business Policies: These policies will no longer include an Arbitration Clause. 2. Commercial Lines of Business Policies: These policies will have an Arbitration Clause. The clause will state: "The parties to the contract may mutually agree and enter into a separate Arbitration Agreement to settle any and all disputes in relation to this policy. Arbitration shall be conducted under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996." 3. Transitory Provisions: New Policies (issued after the date of this circular): Arbitration Clause will be removed from all retail policies. The clause specified in point 2 will be considered the Arbitration Clause for all commercial insurance policies. 4. Existing Policies: The existing Arbitration Clause will remain valid until the term of the policy unless a policyholder specifically requests its replacement with the clause mentioned in point 2 above. The clause mentioned in point 2 will automatically replace the existing Arbitration Clause in all commercial policies from the date of renewal falling on or after the date of this circular.

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