New Delhi, October 5: The Insurance Regulatory and Development Authority of India (IRDAI) has formed a 12-member working group to review the product structure of title insurance, which covers any loss caused due to a defect in the ‘title’ of the property.
The group, according to the regulator, will examine legal and regulatory framework, study the structure, and also analyse the reasons for sluggish demand for title insurance products available in the Indian market.
According to IRDAI, the number of title insurance policies sold are minimal despite the availability of product for the last one-and-half years. In India, only a few general insurers provide title insurance products, and its policy terms and conditions, scope of coverage vary according to the support received from the insurers. The working group is expected to submit its detailed report by January 2020.
The Real Estate (Regulation and Development) Act 2016 (RERA) mandates general insurers to provide title insurance products, aimed to protect the interest of the owners, investors including lenders against any flaws in the title to a property. Here are a few covered risks under title insurance, as follows:
- Any defect on the ‘title’ caused by forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation
- Failure of any person or entity to have authorised a transfer or conveyance
- Title not properly created, executed, witnessed, sealed, stamped, acknowledged, notarised or delivered
- Title executed under a falsified, expired or otherwise invalid power of attorney
- Title not properly filed, recorded, or indexed in the public records
Further, the panel will also examine the impact of title insurance on the marketability, develop a standard title insurance product suitable to Indian market, and recommend measures to boost the demand for the product, IRDAI said in a note.