Irda to approve products under use-and-file route

In the use-and-file regime, an insurer has to adhere to the standardised norms and later send information on the product to the regulator's office

The Insurance Regulatory and Development Authority (Irda) has said it will approve products under the use-and-file regime. “We had asked companies to suggest the type of products and wordings of the products. Once this is standardised, the use-and-file method can be used for product approvals. This will ensure faster introduction of products,” said Irda Chairman T S Vijayan.

Currently, Irda follows the file-and-use route, under which all products have to be filed with the regulator before being launched in the market.

In the use-and-file regime, an insurer doesn’t have to file a product with Irda; they have to adhere to the standardised norms and later send information on the product to the regulator’s office. In the meantime, the insurer can sell the product.

Vijayan said insurers were yet to introduce products under the use-and-file route.

Speaking at a seminar on consumer education, he said all products re-filed to comply with new product guidelines had been approved. He added surveyors had to be modernised; this would help adhere to timelines and ensure claims weren’t held up for one-two years.

Irda is planning an institute for surveyors, which will have a self-governing board.

On the need for simpler products in the industry, Vijayan said insurers should compete with one another in developing simple and innovative products. Products that were easy to understand would help reduce policyholder grievances, he added.

The Irda chief also said the industry needed more professional and active agents.