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Market now, get nod later: Irdai eases approval for health insurance products

Health portfolio has emerged as the biggest segment in the general insurance category with a premium income of Rs 73,582 crore in FY22, a rise of 25.39 per cent.

In the “File and Use” system, an insurer, who wishes to introduce a new product, has to file an application for the product with the Irdai and use the product for sale in the market only after getting all the regulatory approvals. (Representational)

The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday extended the “Use and File” procedure to all health insurance products,  facilitating faster customer access to health policies.

All categories of products and add-ons or riders to be introduced or modified or revised under health insurance business and offered by general and health insurance companies are permitted to be launched through “Use and File”, Irdai said in a circular to the CEOs of insurance companies.

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Health portfolio has emerged as the biggest segment in the general insurance category with a premium income of Rs 73,582 crore in FY22, a rise of 25.39 per cent. Under the “Use and File” system, insurers are permitted to market products without the regulator’s prior approval, thus avoiding a longer waiting duration in offering innovative insurance solutions to customers in order to help address the dynamic environment. However, in the “File and Use” system, an insurer, who wishes to introduce a new product, has to file an application for the product with the Irdai and use the product for sale in the market only after getting all the regulatory approvals.

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“The board approved policy shall also comply with the norms specified herein and the same shall be complied at the point of launching the products or modification or revision of the products. The Product Management Committee of the insurer should ensure compliance to the policy of the board while signing of the new products or modification of products,” Irdai said.

Tapan Singhel, MD and CEO, Bajaj Allianz General Insurance, said, “the proactive initiative by Irdai will provide some necessary mechanisms to insurance companies who wish to bring out more innovative products in the market at a faster frequency.” Customers have the opportunity to choose from a plethora of insurance products that best suits their needs and thus secure their lives against any exigencies, Singhel said.

Insurers should file the proposed name of the product, date of approval by Product Management Committee and they should obtain the UIN. “Thereafter, insurers should file the product along with all other with the authority within 7 days of launch of the product,” the circular said.

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Insurers should ensure that the product pricing is viable, self-sustainable and affordable to the targeted market. The revision in the price, if any, should be effected only based on the underlying claims experience (Incurred Claims Ratio) and to make the product viable and self-sustainable. Insurers should disclose the rationale for revision in price along with the underlying claim experience (ICR) of the product that lead to the revision in the price in their website.

If optional covers or add-ons are offered with very low premium rates giving an indication that coverage is not material under the said add-on or optional cover, Insurers are advised to consider subsuming such add-ons or optional covers into base cover of the product, Irdai said.

Pricing of the products or add-ons should be based on the generally accepted actuarial principles. The premium rates should appropriately reflect the benefits, terms and conditions of the underlying products or add-ons and should not be discriminatory.

First published on: 02-06-2022 at 01:53 IST
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