As per the revision, companies can now release new insurance products for agriculture and related activities, and later file it for approval under the IRDA.
The regulator has given general insurance companies permission to file retail goods for agricultural and related operations under a “use & file” procedure instead of the previous approach of the “file & use” process.
Businesses may release a product on the market before requesting approval from the Insurance Regulatory and Development Authority of India (Irdai) and later file for the approval. Prior to this revision, companies had to wait for Irdai permission before launching items, leading to delay. Sometimes it may take three months for a product to be approved.
Earlier Revisions
Debashish Panda, the chairman of Irda, had earlier stated during a meeting with industry participants that the insurance regulator intended to restructure the product certification procedure so that participants may adhere to a “use and file” rather than “file and use” method.
In June, the Insurance Regulatory and Development Authority of India (Irdai) had extended the “Use and File” procedure to all health insurance products and most general insurance products under fire, motor, marine, and engineering. The measure was a bid to empower insurance companies to respond to the emerging trends and needs of the market in terms of products, to improve the ease of doing business in the sector.
In a statement released on Thursday, Irdai said that this move will allow the insurance firms to devise and roll out innovative products for these segments in a punctual manner, thus enhancing ease of doing business. This in turn enlarges the choices available to the policyholders.
They highlighted that agriculture and allied activities account for one of the largest sources of livelihood in India. Furthermore, the untoward impact of natural catastrophes on the vulnerable sections of society is vast and emphasizes the need to design and extend suitable insurance products for their protection.
With the exception of individual savings, individual pensions, and annuity products, Irdai has expanded the “use & file” approach to most life insurance products.
The sector has grown, so it does not make sense to obtain the regulator’s prior clearance before launching every product. This is the justification behind the introduction of the “use & file” approach for the majority of items.
