IRDAI’s new norms to prompt innovative policies

Image credit: The Hans India

The IRDAI’s decision to enable ‘use and file’ for most insurance products, according to experts, will encourage insurers to quickly develop innovative covers for the benefit of clients, as well as deepen insurance penetration in the country.

Last week, the Insurance Regulatory and Development Authority of India (IRDAI) extended the “use and file” method for most life insurance policies, allowing insurers to launch new products without the regulator’s approval. Previously, similar exemptions applied to all health insurance policies and nearly all general insurance products.

Experts believe that the looser rules for launching insurance products will make insurers more accountable because they will be held liable for items that are supplied in the market without IRDAI clearance. The new criteria, according to S Prakash, MD, of Star Health and Allied Insurance, will help the industry introduce products more quickly. “This also places a lot of responsibility on the shoulders of insurers.” “While the regulator has given industry more latitude, it will also compel insurers to act more responsibly,” he said.

According to Prasun Sikdar, MD & CEO of Manacling Health Insurance Company, the reforms would limit human interaction, even more, shortening the time it takes for acceptable solutions to reach underserved geographies and enabling their debut in a more timely and effective manner. Rakesh Jain, CEO of Reliance General Insurance, said the IRDAI’s move will foster customer-centricity and product innovation, which will increase insurance penetration in the country.

“This new approach by the IRDAI will enable customers to tailor their coverage to meet their specific needs, while also encouraging insurers to respond rapidly to those demands.”

“There will be no more ‘one-size-fits-all’ product solutions; customers will now have the power of choice,” Jain added.

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