Insurers can now launch new health insurance products without IRDAI’s nod


The Insurance Regulatory and Development Authority of India (IRDAI) has extended the ‘Use and File’ procedure for all the health insurance products and almost all the general insurance products under health insurance business. This is a big change moving from the current regime where insurers are required to get a prior approval for launching a new product to a new regime where they can launch new products without any prior approval.

“Use and File procedure essentially means that insurers can introduce their products to the market on filing with the regulator thus avoiding a longer waiting duration in offering innovative insurance solutions to customers in order to help address the dynamic environment,” says Tapan Singhel, MD and CEO, Bajaj Allianz General Insurance.

Earlier the flexibility was given for group insurance products but now retail products have also come under the new norms. “Earlier group products were filed as U&F (Use and File) and retail products were filed as F&U (File and Use). The new circular provides U&F provision for all products and add on covers. This is applicable for both fresh filing and also on modification/revision of policies,” says Dr. S Prakash, MD Star Health and Allied Insurance.


Greater flexibility to insurance company to launch new products

The insurance industry is expected to use this opportunity for introduction of customized and innovative products, expansion of the choices available to the policyholders in order to address the dynamic needs of the market, which will further help in enhancing the insurance penetration in India.

“The announcement has empowered insurers since the entire process of product approval and launch has been simplified, thereby addressing a key challenge faced by insurers. While the move provides for speedy introduction of innovative products, Insurers will now have a greater responsibility to ensure robust product development and pricing along with policyholder protection,” says Shanai Ghosh, Executive Director & CEO,

General Insurance.

Customers to get more innovative products at faster rate

IRDAI expects that these initiatives will enable the insurance industry in launching suitable products in a timely manner. “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,” says Singhel.

Customers are likely to get more customized products which caters to their specific needs. “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,” says add Singhel.

How the new process will work

IRDAI tested this process initially with health insurance products in July 2020 and modified it later in February 2021 and now it has expanded to all health and general insurance products.

Insurers need to have in place the board approved policy of products that are to be offered or modified or revised. The policy should also comply with the newly issued norms and the same shall be complied at the point of launching the products or modification / revision of the products. The Product Management Committee of the insurer is required to ensure compliance to the policy of the board while signing of the new products or modification of products.

Insurers are required to file the proposed name of the product, date of approval by Product Management Committee and shall obtain the UIN. Thereafter, they need to file the product along with all other documents specified in Consolidated Guidelines on Product Filing in Health Insurance Business dated 22 July, 2020 with the IRDAI within 7 days of launch of the product.

Insurers need to ensure that the product pricing is viable, self-sustainable and affordable to the targeted market. The revision in the price, if any, could be done only based on the underlying claims experience (Incurred Claims Ratio) and to make the product viable and self-sustainable.

Where 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. Pricing of the products/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/add-ons and shall not be discriminatory.

All categories of the products, namely, Pilot Products, Health plus Life Combi Products and Health Package Products are also allowed to be launched under the above procedure. Non-life package products where UIN is already obtained for non-life covers are also permitted to be launched in accordance to the norms specified herein.

These norms shall come into force with immediate effect. All existing products filed under File and Use procedure and whose UIN are yet to be issued are deemed withdrawn and insurers may launch the same under the Use and File procedure specified under these guidelines.



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