The insurance proposal form is a document provided by the insurance company to a prospective policyholder to make his offer and uses the information contained therein to assess the nature of risks and the terms and conditions applicable to risks, which the insurance company will accept. In layman's terms it's an application form to secure an insurance policy

Insurance proposal forms are structured in the form of a questionnaire and are provided for different classes and sub-classes of insurance business. The questions contained in the insurance proposal form should be read carefully by prospective policyholders and completed by disclosing full and accurate information. If the insurance proposal form is filled in by another person the prospective policyholder is required to ensure that all information provided therein is full and accurate prior to signing the document.

The insurance company could initiate an investigation to verify the accuracy of information contained in an insurance proposal form and if any such information is found to be false or inaccurate, the insurance company could reject a claim. Therefore, in order to avoid a rejection of a claim due to non-disclosure or false disclosure prospective policyholders are advised to complete the insurance proposal form by providing full and accurate information.

A potential policyholder has a right to obtain his/her policy document in a language that he/she prefers, whether it is in Sinhala, Tamil or English.

The important factor is to make sure that the terms and conditions of the policy are read and understood properly. Insurance Policy is an evidence of a legal contract between the policyholder and the insurance company. As in other contracts, it is better to make sure that all provisions in the policy are understood and any doubts clarified with the agent/broking company or the insurance company, prior to signing the contract by the two parties. Generally, insurance companies give a specific time period (majority of companies give 14 days) from the effective date of the policy within which a policyholder could reject the policy if he/she is not satisfied. In such situation a company will refund the premium paid, subject to deduction of initial expenses, if any.

There could be countless options to choose from, policy types, and policy conditions. Anyone who desires to buy an insurance policy needs to be diligent when choosing a policy to suit the needs. It is worth taking time to discuss with the insurance company or with an intermediary (the insurance agent or the insurance broking company) about the policy that fulfils one’s requirements.

It appears that some policyholders pay their insurance premium to third parties not regulated by the Insurance Board of Sri Lanka (IBSL) without understanding the underlying risks. The public is advised to pay their insurance premium only to a registered insurance company, a registered insurance broking company or a registered insurance agent of a registered insurance company or insurance broking company, who are authorised to accept insurance premium from policyholders in terms of the Regulation of Insurance Industry (RII) Act No.43 of 2000.

In terms of Section 89 of the RII Act, insurance broking companies and insurance agents are required to remit the premium collected by them on behalf of an insurance company, within two weeks of such collection to the respective insurance company. However, if you have paid your insurance premium to any third party not classified in the paragraph above, you will have no guarantee that the insurance company has received the insurance premium that you have paid.