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The Insurance Regulatory and Development Authority of India (Irdai) has permitted insurers to offer health and most general insurance products to buyers without its prior approval.

The regulator has now extended the 'Use and File' or U&F procedure for all health insurance products and almost all general insurance products.

So what is the U&F procedure? In this, insurers are allowed to market certain products without the prior approval of Irdai. However, they need to file their product with the regulator within a certain time frame. 

Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance, said, "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 customized and innovative insurance products to buyers."

What buyers should know: The newly introduced reforms are advantageous for the insurance industry. Dr S Prakash, MD, Star Health and Allied Insurance explains, "Earlier group products were filed as U&F and retail products were filed as 'File and Use' or F&U. The new circular provides U&F provision for all products and add on covers. This is applicable for both fresh filing and modification/revision of policies." He further said, "Insurers will now need to file the product within seven days of launch and obtain a UIN. Insurers must know that this is applicable for all products, including pilot and combi products. The new guidelines will help the industry to launch products faster. This also puts a lot of responsibility on insurers. While the regulator has given the freedom to industry, it also will require insurers to act more responsibly."

Insurers must ensure that the filing of the product should be done as per board approved U&F policy and see that product pricing is viable, self-sustainable and affordable. Premium revisions must be based on Incurred Claims Ratio (ICR) to make the product viable and sustainable while ensuring that insurers maintain proper data. "If any Insurer is found non-compliant, the regulator can ask them to withdraw the product and/or withdraw the U&F facility for a specified duration," added Prakash.

With the introduction of these ease of product filing norms, buyers will have the opportunity to choose from many insurance products available in the market. However, they need to be more careful while opting for newly launched products, especially the pilot, and combi products, as the products can be withdrawn by insurers basis of inadequate sale or non-profitability of product, said an expert.

 

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