IRDAI warns insurers not to accept defunct Rs 500/1000 notes towards premium

Refuting reports that individuals can deposit their insurance renewal premium in now defunct Rs 500/1000 currency notes, Irdai on Tuesday clarified that it has only granted extension of grace period by up to 30 days.

Irdai said it has been brought to its notice regarding a news item floating in the press that the Authority has instructed insurers to accept old Rs 500 and Rs 1000 notes for depositing insurance premium.

"The circular does not mention acceptance of the said old notes and it merely extends the grace period of the policies issued by life insurers," Insurance Regulatory and Development Authority of India (Irdai) said in a circular.

Policyholders are allowed a grace period of 30 days to submit their insurance renewal premium, however, in this case it has been extended by similar days.

Earlier on November 25, Irdai had said that keeping in view the inconvenience to policyholders, it allows extension of grace period by an additional 30 days for all policies issued by life insurers the premium of which fell/falls due on or after November 8, 2016 till December 31, 2016.

Irdai said the special one-off dispensation was given so that "policyholders do not suffer" from non-payment of due premiums due to recent cash crunch.