IRDAI permits insurance companies to launch new products without prior approval
Insurance companies can now introduce products without obtaining any prior approval from the Insurance Regulatory and Development Authority of India (IRDAI). IRDAI, which is responsible for regulating and licensing the insurance industry, stated that the ‘Use and File’ system (which allows insurers to launch a product first and then file its details with the regulator) now extended to all health insurance products and almost all general insurance products.
The move, according to the regulator, is in line with the reform agenda aimed at creating a fully insured India, as well as a step toward strengthening the insurance sector’s ease of doing business. It expressed the hope that the initiative will enable the insurance industry to introduce suitable products on time. Until now, insurance companies had to acquire regulatory approval before launching new products.
IRDAI said, “The insurance industry is expected to utilize this opportunity to meet the dynamic needs of the market for the introduction of customized and innovative products and expansion of options available to policyholders, which will help in increasing the insurance penetration (percentage of the total life insurance premium paid in a year to GDP) in India.
As per the revised guidelines, IRDAI has allowed general insurers to file all products under fire, marine, motor, and engineering lines of business under ‘use and file’ process for both retail and commercial categories. This, according to IRDAI, is intended to help the industry adapt more quickly to evolving market needs in terms of designing and pricing general insurance products, as well as promoting efficiency in the general insurance business.
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 businesses are permitted to be launched through ‘Use and File,’ according to another circular from the regulator. They will, however, have to follow certain other rules. Under the ‘Use and File’ approach, all product categories (pilot products, health plus life combi products, and health package products) are also eligible to be launched. The IRDAI’s judgment, according to Kapil Mehta, a co-founder of SecureNow, will encourage insurers to introduce a wider range of products more frequently. “In my opinion, this is a fantastic move,” he continued.
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