The IRDAI announced yesterday that it will give general insurance companies more leeway in designing and pricing products under diverse lines of business and allow them to launch these products without previous regulatory clearance.
All general insurance products are now permitted to be filed under the "Use and File" system and can be launched without prior approval. This change has immediate effect.
The IRDAI stated in a statement, "This will provide the necessary impetus to general insurance companies for a broad-based approach in designing and timely launch of products commensurate with market requirements and to effectively serve policyholders, thereby enhancing the insurance penetration in India."
According to the regulator, the miscellaneous insurance division of general insurance is a distinct segment that requires innovative conceptualization in order to meet the constantly changing needs of policyholders.
The IRDAI stated, "In the past, products with a sum assured beyond Rs. 5 crore ($608,000) may be introduced without previous IRDAI permission, while products with a sum assured up to Rs. 5 crore still required regulatory approval prior to market introduction."
The IRDAI noted that upon examining the current product filing system, the industry would be able to adapt more quickly to emerging market needs in terms of creating and pricing general insurance products, and the conduct of general insurance business will be more efficient. Consequently, the Authority allows general insurers to submit all products under Miscellaneous lines of business (including adjustments to existing products) through the "Use and File" procedure for both retail and commercial categories.
The Authority has loosened operational standards for insurers in recent months. The newest relaxation of regulations is a result of the IRDAI's decision on 1 June 2022 to permit all types of goods and add-ons or riders introduced or modified/revised under health insurance business and supplied by general and health insurance companies to be launched via "Use and File." In addition, the regulator announced on July 14 that general insurers are entitled to register retail products for agricultural and related operations under the "Use and File" approach.
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