Regulator IRDAI Wednesday permitted insurers to introduce health and almost all general insurance products without its prior approval, a move aimed at ensuring a ‘a fully insured India’.
The Insurance Regulatory and Development Authority of India (IRDAI) extended the ‘Use and File’ procedure for all health insurance products and almost all general insurance products in line with the reforms agenda taken up towards ‘having a fully insured India’, the regulator 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,” it said.
The regulator further said it is envisaged that the initiatives will enable the insurance industry in launching suitable products in a timely manner.
The insurance industry is expected to use this opportunity for the introduction of customised and innovative products, and expansion of the choices available to the policyholders to address the dynamic needs of the market, which will further help in enhancing the insurance penetration in India, it added.
Commenting on the IRDAI’s move, Bajaj Allianz General Insurance MD and CEO Tapan Singhel said the proactive initiative by the regulator will provide some necessary mechanisms to insurance companies which wish to bring out more innovative products in the market at a faster frequency.
“Use and File procedure essentially means that insurers can introduce their products to the market on filing with the regulator thus avoiding a long waiting duration in offering innovative insurance solutions to customers in order to help address the dynamic environment,” he said.
Kapil Mehta, a co-founder of SecureNow, said the Irdai’s decision will encourage insurers to launch a variety of products more often.
“An excellent step in my view,” he added.
Shanai Ghosh, Executive Director and CEO, Edelweiss General Insurance, said the announcement has empowered insurers as 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,” Mr. Ghosh added.
As per the modified guidelines, IRDAI has permitted general insurers to file all products under fire, marine, motor and engineering lines of business under the ‘Use and File’ procedure for both retail and commercial categories.
This, IRDAI said, is aimed at facilitating the industry to respond faster to emerging market needs, in terms of designing and pricing general insurance products and promoting efficiency in the conduct of the general insurance business.
In another circular, the regulator said all categories of products and add-ons or riders to be introduced or modified/revised under the health insurance business and offered by general and health insurance companies are permitted to be launched through ‘Use and File’. However, they will have to adhere to certain other norms.
All categories of the products (pilot products, health plus life combination products and health package products) are also allowed to be unveiled under the ‘Use and File’ procedure.