Synopsis

In a notification on its website IRDAI said life insurance companies can now launch products in the market and later file updates with the regulator.

Agencies

The Insurance Regulatory and Development Authority of India (IRDAI) has allowed life insurance companies to introduce products without taking its prior permission, extending the same relaxation it has given to health and general insurance companies ten days ago.


In a notification posted on its website, the IRDAI said life insurance companies could now launch products in the market and later file updates with the regulator.


The industry has now matured to a stage where approval for every product is not required, the regulator said.


"This move will enable life insurers to launch most of the products (except individual savings, individual pensions and annuity) in a timely manner according to the dynamic needs of the market. This will result in improving ease of doing business for the insurers and also lead to expansion of the choices available to the policyholders," the IRDAI said.


Life insurers will need to have a board-approved product management and pricing policy (BAPMPP) to launch new products.


Company boards will also need to constitute a product management committee (PMC) which will include an appointed actuary, chief risk officer, chief marketing/distribution officer, chief technology officer and chief compliance officer of the insurer as members. Other members of the senior management can be called as invitees.


"The PMC shall review and approve the products/riders in line with BAPMPP. The life insurance industry is expected to use this opportunity to respond faster to the emerging market needs, in terms of designing and pricing of insurance products resulting in more choices for the policyholders, which will further help in increasing the insurance penetration in India," it said.


Earlier this month, the IRDAI had extended the ‘use-and-file’ procedure for all the health insurance products and almost all the general insurance products in line with the reforms agenda taken up towards having a fully insured India.


Industry captains said the move would give the industry agility and flexibility to expand business.


"This is a long-standing demand and is a very positive move. It will substantially reduce the time taken to introduce new products as approvals itself used to take a couple of months," said Vighnesh Shahane, chief executive at Ageas Federal Life Insurance.