The Insurance Regulatory and Development Authority of India (IRDAI) recently said that life insurance companies can now launch their products without prior approval. The announcement came just days after the regulator allowed health and general insurers to “use and classify”, i.e. launch the product first and then file it with the regulatory body.
“In its continued efforts for the reform agenda aimed at having a fully insured India, the Insurance Regulatory and Development Authority of India (IRDAI) has extended the ‘Use and File’ procedure for most insurance products– life. This now means that life insurance companies can also launch these products without prior approval from IRDAI,” the regulator said in a statement last week.
Experts say IRDAI’s decision is progressive. This will give impetus to the industry.
“This is a progressive and forward-looking development for the industry, as the principles-based approach encourages insurers to be more responsible and innovative in their product design. This will give new impetus to the insurance industry as we respond more quickly to the needs of emerging markets, both in terms of design and pricing,” said Subhrajit Mukhopadhyay, Executive Director of Edelweiss Tokio Life.
“This will significantly improve time to market by reducing the time between conception and actual launch of a product, enabling insurers to respond to dynamic market needs at a faster pace, especially in this era. digital world where customer needs are constantly changing.This is another important step towards improving insurance penetration in India,” he added.
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Earlier on June 1, IRDAI had extended similar relaxations to all health insurance products and almost all general insurance products.
Explaining the need for flexibility for insurers when launching new products, IRDAI said: “Previously, when the industry was at a nascent stage, it was mandatory for insurance companies to obtain pre-approval before to launch any life insurance product; however, with the maturity reached by the industry, it is envisaged that the necessary relaxations may be permitted.
What is not allowed
With the new easing, life insurance companies will be able to launch most of their products. However, pre-approval would be required for individual savings, retirement and annuity plans.
“This decision will allow life insurers to launch most products (except Individual Savings, Individual Retirement and Annuity) in a timely manner, based on dynamic market needs. This will result in improved ease of doing business for insurers and will also lead to expanded choices for policyholders,” IRDAI said.
The regulator further said that life insurers should have a Board Approved Product Management and Pricing Policy (BAPMPP).