Insurance companies can now launch insurance products without obtaining any prior approval from the Insurance Regulatory and Development Authority of India (IRDAI).
IRDAI, which is tasked with regulating and licensing the insurance industry, on Wednesday announced to extend the 'Use and File' procedure for all the health insurance products and almost all the general insurance products.
The regulator in a statement said that the decision is in line with the reforms agenda taken up towards having a fully insured India and also a step towards improving the ease of doing business in the insurance sector. It expressed hope that the initiative will enable the insurance industry to launch suitable products in a timely manner.
So far, insurance companies were required to obtain prior approval from the regulator to launch new products.
"The insurance industry is expected to use this opportunity for the introduction of customised and innovative products and expansion of the choices available to the policyholders to address the dynamic needs of the market, which will further help in enhancing the insurance penetration in India," IRDAI said.
Commenting on the IRDAI's move, Rachit Chawla, founder & CEO of Finway, said that the decision will ensure break-free progress not only for the companies but for other businesses as well. He said that during the pandemic, when enterprises were struggling with slow market and halted operation facilities, an inadvertent mishap such as fire or theft in the warehouse was a big jolt to businesses. In those difficult times, these were the insurance companies who played the role of saviours while rescuing businesses from closures and bankruptcy.
"The relevance of this sector is quite significant amidst turbulent market conditions, especially for small and mid-sized companies," he said, adding that "this decision will bring a lot of innovation in the insurance industry, tons of customised products will be launched and a number of products and pricing will be simplified. Use & file procedure will lead to the process faster being used for all products, new filing & modification."
Whether the latest decision will help the government to meet its target of having a fully insured India, he said, "This will definitely make a positive impact. There are a lot of regions which need customized products as per their demographic requirements. The decision will lead to an impact & surge in people taking health insurance, a very positive mood for the industry."
Chawla said a win-win equation can be created if the majority jumps to seek insurance services, if not the entire country.
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