IRDAI’s new norms will boost insurance penetration, say experts

IRDAI's new norms to launch insurance products will make insurers more responsible because they will become accountable for the products being sold to people and will address the needs of the people

IRDAI's new norms will facilitate the launch of innovative products to appear in the market, which will be more responsive to consumer needs, said experts

The Insurance Regulatory and Development Authority of India (IRDAI)’s new norms, extending the ‘use and file’ procedure for most of the life insurance products, is all set to encourage insurers to come out with innovative policy covers. This will not only benefit customers, it will also deepen the insurance penetration in the country, said experts in news reports.

Last week, IRDAI widened the scope of all the ‘use and file’ procedure for most of the life insurance products. This will go a long way to facilitate insurers to launch new products quickly without getting bogged down waiting for the regulator’s prior approval.

According to experts, the easing of norms by IRDAI to launch insurance products will make insurers more responsible because they will become accountable for the products being sold to people.

Health insurance companies realises that this new move puts the onus on them to act in a more responsible manner. IRDAI’s insurance reforms will further bring down human intervention, cut down waiting time and will ease the entire process. This in turn will allow insurance companies to reach suitable products to hitherto untapped geographies and launch products faster and in a more efficient manner.

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IRDAI’s new move on life insurance will empower customers and they can customise their own coverage according to their needs. Insurers too will ensure they meet their requirements quickly. Innovative products will appear in the market, which will be more responsive to consumer needs, said experts on this new development.

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. India is still considered be an under-penetrated market and IRDAI’s insurance reforms will also help the country in amplifying much-needed insurance penetration, said news reports.

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Meanwhile, in another development, the National Consumer Disputes Redressal Commission (NCDRC) has directed IRDAI to investigate the role of insurance agents selling life insurance policies.

The NCDRC has asked IRDAI to issue fresh guidelines and revise and alter proposal forms to drive home to customers that non-disclosure of medical conditions would lead to repudiation. The NCDRC was hearing an appeal filed by HDFC Standard Life lnsurance Company Limited challenging an order of the state consumer disputes redressal commission in Jaipur, which had given a ruling favouring the consumer.

NCDRC set aside the state commission order and allowed the appeal. The  NCDRC asked the IRDA to “issue fresh guidelines on the conduct and responsibilities of the insurance agent when dealing with life insurance policy on the need for full disclosure of all diseases suffered by the customer in the proposal form and implications of non-disclosure. The proposal form can also be suitably modified to this effect”.

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