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Non-life insurers will have to be more responsible and accountable following the insurance regulator’s decision to allow general and standalone health insurers to launch products without prior approval.
While insurers have welcomed the move as it gives them greater freedom and enhances efficiency in launching products, they also believe that customer protection will have to be even more of a priority.
Faster launch of products
“The new guidelines will support the industry to launch products faster. This also puts a lot of responsibility on insurers,” said S Prakash, MD, Star Health and Allied Insurance.
Insurers must ensure that filing be done as per board approved use and file policy and ensure that product pricing is viable, self-sustainable and affordable. Revisions must be based on incurred claims ratio so as to make product viable and sustainable while ensuring that they maintain proper data, Prakash added.
The guidelines, announced by the Insurance Regulatory and Development Authority of India (IRDAI) on June 1, has extended the ‘use and file’ procedure for all health insurance products and almost all general insurance products. “The guidelines show IRDAI’s confidence in the industry and it will help insurers launch products faster,” said MN Sarma, Secretary General, General Insurance Council.
Action against non-compliance
He added since the products are use and file, they will have to be filed with the IRDAI. If something is not right, the regulator may ask the insurer to withdraw the product, he noted.
Shanai Ghosh, Executive Director and CEO, Edelweiss General Insurance, said “Insurers will now have a greater responsibility to ensure robust product development and pricing along with policyholder protection.”
The IRDAI in its circular, too, has made it clear that it would take action against any insurer found to be non-compliant with the procedure. In such cases, the IRDAI may direct the insurer to withdraw the product. It could also withdraw the use and file facility for the insurer for a period as may be determined.
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