IRDAI's decision to permit 'use and file' facility for most of the insurance products will encourage insurers to come out with innovative covers quickly to the benefit of customers and also deepen the insurance penetration in the country, said experts.
The Insurance Regulatory and Development Authority of India (IRDAI) last week extended the 'use and file' procedure for most of the life insurance products, thereby allowing insurers to launch new products without prior approval of the regulator.
Earlier, similar relaxations were extended to all the health insurance products and almost all the general insurance products.
The relaxed norms for launching insurance products, experts feel, will also make insurers more responsible as they would be held accountable for the products which are offered in the marketplace without prior approval of IRDAI.
S Prakash, MD, Star Health and Allied Insurance said the new guidelines will support the industry to launch products faster.
“This also puts a lot of responsibility on insurers. While the regulator has given freedom to industry, it also will require insurers to act in a more responsible manner,” he said.
Prasun Sikdar, MD & CEO - ManipalCigna Health Insurance Company said the reforms will further reduce the human intervention, thereby cutting down on the cumbersome waiting period that will ease the process, help the suitable products to reach the untapped geographies and enable their launch in a faster and efficient manner.
Commenting on IRDAI's move, Rakesh Jain, CEO of Reliance General Insurance, said it will support customer-centricity and fuel product innovation, which in turn will boost insurance penetration in the country.
“This new move by IRDAI will empower customers to customize their own coverage as per their needs and encourage insurers to address those requirements quickly. No more 'fit for all' product solutions; the power of choice will now lie with the customers,” Jain added.
According to Satishwar Balakrishnan, MD and CEO, Aegon Life Insurance, IRDAI's move will augment product innovation and foster greater responsiveness to consumer needs.
“Use and File will help digital insurers like us to swiftly meet consumer demands. This will increase insurance penetration as well,” Balakrishnan said.
Casparus Kromhout, MD & CEO, Shriram Life Insurance Company said that with this move, companies can move faster to bring new solutions to their customers.
“One more hurdle has been removed signalling a move towards self-management and self-regulation by insurance companies,” said Kromhout.
Anil Kumar Aggarwal, MD & CEO of Shriram General Insurance opined that the move would provide a much-needed boost to insurers for filling innovative and customised products as per their customer need.
India, he said is an under-penetrated market and this will also help the country in increasing much-needed insurance penetration.
Abhishek Poddar, Co-founder and CEO, Plum said IRDAI's new guidelines should help accelerate the pace of product launches and foster a spirit of speed and innovation.
IRDAI expects the initiatives taken by it will enable the insurance industry to launch suitable products in a timely manner, resulting in more choices for policyholders.