Non-life insurers get free hand on plans
The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday allowed health and non-life insurance companies to launch products without any prior approval.
“All categories of products and add-ons or riders to be introduced or modified / revised under health insurance business and offered by general and health insurance companies are permitted to be launched through “Use and File” (by duly complying with the norms), the regulator said on Wednesday.
The regulator said that it 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. “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,” it said.
According to the use and file norms, insurers shall have in place the board approved policy of products that are to be offered or modified / revised which shall at minimum address the philosophy of the company in enhancing the insurance penetration, health insurance needs of the insurable population, provision of inclusive insurance to all the market segments, the need for providing simple and easily comprehensible products. The product management committee of the insurer shall ensure compliance to the policy of the board while signing on the new products or modification of products.
All categories of the products, namely, Pilot Products, Health plus Life Combi Products and Health Package Products are also allowed to be launched under the same procedure. Non-life package products where use and file is already obtained for non-life cover are also permitted to be launched.
Shanai Ghosh, executive director and chief executive officer at Edelweiss General Insurance, said, “The announcement has empowered insurers since the entire process of product approval and launch has been simplified, thereby addressing a key challenge faced by insurers. While the move provides for speedy introduction of innovative products, Insurers will now have a greater responsibility to ensure robust product development and pricing along with policyholder protection.”
Insurers shall file the proposed name of the product and date of approval by the product management committee. Thereafter, they have to file the product along with all other documents specified in consolidated guidelines with the authority within seven days of launch of the product.
Insurers shall ensure that the product pricing is viable, self-sustainable and affordable to the targeted market, said the regulator.
It is envisaged that these initiatives will enable the insurance industry to launch suitable products in a timely manner. The insurance industry is expected to use this opportunity for introduction of customised and innovative products, expansion of the choices available to the policyholders, the regulator said.