“It is envisaged that these initiatives will enable the insurance industry to launch suitable products in a timely manner. The insurance industry is expected to utilize this opportunity to introduce customized and innovative products, IRDA said in a statement.
The ‘use and file’ system has been a long-standing demand of the industry. It was originally envisaged that insurers would be allowed to file and use their products. However, industry executives have been complaining about long delays in approving the products. new irdai chairman Debasish Panda Soon after taking charge in March this year, he promised to bring a new wave of reforms in the sector.
Talking to TOI, MN SarmaThe general secretary of the General Insurance Council – a union of non-life companies – said the council has long represented for a ‘use and file’ arrangement. “The industry has matured and no insurer will jeopardize its reputation by offering a product which is not beneficial to the customer. If the regulator finds that a product is not in order, they can ask it to be withdrawn,” he said.
While there is no charge that determines the pricing of the products, the regulator is looking at the prices while granting approvals. It also checks them to see that they are not misleading and that the profit is in line with the signal. According to Sarma, insurers may have to get a product code which is not a big hassle. The main delay used to be in the clearance of the product.
“‘Use and File’ is a system used by non-life regulators globally. This could allow more products to be introduced into the retail sector.” Anjan Dey, CMD, Oriental Insurance,
At the time of liberalization of the insurance sector two decades ago, IRDA had envisaged a ‘file and use’ system whereby a product was submitted to the regulator and if there were no objections within a period of 30 days, they were sold. free to start. However, insurance companies said there will always be questions and the launch of a product will take months.
In the past, the regulator had issues with the industry over several retail products in the non-life segment. One of the early products to be withdrawn following objections was the personal accident cover which offered higher benefits in case of an accident in a public transport vehicle on a holiday. It also objected to non-life companies selling products providing death benefits.