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NEW DELHI: The Insurance Regulatory and Development Authority of India (Irdai), has suggested introduction of a combi micro insurance (MI) product.

A panel on MI, set up by Irdai in February 2020, has suggested a product which can be developed on a modular basis giving flexibility to the insurer to offer coverage to different groups and individuals as per their specific protection needs.

The panel comprises members from NGOs, independent consultants, and others with experience insurance and regulatory fields.

 “A one-stop solution to meet the insurance protection needs of low income groups will go a long way in achieving the objective of increasing insurance penetration in these strata of society," as per the panel.

The panel deliberated upon various issues related to micro insurance such as desired product design, ramping up distribution of MI, using available government channels to bundle insurance along with existing schemes and the need to create required levels of awareness about MI in order to achieve the goal of increasing the spread of this segment of insurance in the country.

The panel said the need of the hour is better penetration of insurance among the vulnerable sections of society.

Insurers may follow a modular approach using various permutations and combinations, leaving the choice to the proposer. Certain standard products prescribed by Irdai can be offered as modules, albeit with a restricted sum insured keeping the target segment in view.

The panel has recommended 14 standard modules and suggests that the product may be sold by insurers either on individual basis or group basis.

It suggested that product may be solicited by all distribution channels authorised to distribute insurance products by Irdai. It may also be sold online, wherever feasible, as per the report.

The committee recommends that the underwriting and servicing of the product be done through the use of seamless technology with prior agreement amongst a life insurer, a general insurer and a health insurer for their respective areas.

They also feel that creation of the required awareness by the insurers in conjunction with the various distribution channels and Government agencies at the grass-root level is necessary and that this aspect requires a special focus to achieve increased penetration amongst the targeted groups, said the report.

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