India’s top insurance regulating body, Insurance Regulatory and Development Authority of India (IRDAI), with an aim to make the country fully insured has allowed insurers to launch health and most of the general insurance products without its prior nod. The Insurance Regulatory and Development Authority of India (IRDAI) has extended the ‘Use and File’ procedure for all the Health Insurance products and almost all the General Insurance products in line with the reforms agenda taken up towards having a fully insured India, it said in a statement.
“This is a stepping stone towards improving the ease of doing business in the insurance sector by moving from the current regime requiring prior approval for launching the products to a regime where products could be launched without any prior approval,” the IRDAI statement, dated June 1, read.
It is envisaged that these initiatives will enable the insurance industry in launching suitable products in a timely manner, IRDAI said. “The insurance industry is expected to use this opportunity for introduction of customized and innovative products, expansion of the choices available to the policyholders in order to address the dynamic needs of the market, which will further help in enhancing the insurance penetration in India,” it added.
Indian Insurers Happy with IRDAI Decision
Commenting on the IRDAI move, S Prakash, MD, Star Health and Allied Insurance said that it will put a lot of responsibility on the insurers along with giving them freedom. “Insurers will now need to file the product within 7 days of launch and obtain an UIN. This is applicable for all products including pilot, combi products. The new guidelines will support the industry to launch products faster. This also puts a lot of responsibility on insurers. While the regulator has given freedom to Industry, it also will require insurers to act in a more responsible manner,” he said.
“Insurers must ensure that filing be done as per board approved U&F policy and ensure that product pricing is viable, self- sustainable and affordable. Revisions must be based on ICR to so as to make product viable and sustainable while ensuring that they maintain proper data,” he added.
If any Insurer is found non compliant, the regulator can ask them to either withdraw the product, and/or withdraw the U&F facility for a specified duration, Prakash warned.
“The announcement to provide flexibility in product filing procedure for Insurance Policies is very positive and highly welcome decision by IRDAI. This will aid customer centricity and fuel product innovation which should help augment insurance penetration in our country,” said Rakesh Jain, CEO of Reliance General Insurance.
“In the past when we have filed different insurance products, we have seen that the time taken up from filling the insurance product to getting an approval, would generally take at least a year. But now with this new circular, it would enable insurers to not only file but launch their products quickly, enabling the customers to experience a wide range of products,” noted Yogesh Agarwal, founder and CEO of Onsurity, a technology led monthly subscription-based employee health benefits platform.
Meanwhile, Vivek Iyer, partner and national leader of Financial Services at Grant Thornton Bharat, said, that the new IRDAI decision would also mean that the insurance industry will need stronger governance in some areas. “The provision of U&F procedure for retail products, is a significant milestone for the non-life business, especially because of the era of innovation that it will usher in and the deeper insurance penetration that it will bring about. This also means that the insurance industry would need to bring in stronger governance around product development and risk management,” Iyer said.
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