To plug yet another loophole in the insurance industry, the Insurance Regulatory and Development Authority (Irda) has asked insurance companies to follow the ‘File and Use’ guideline for social schemes sponsored by the government.
The regulator has asked insurers to file the product after the tender had been awarded under the ‘file and use’ procedure, within 10 days from the date of such an award. Pricing should be based on the previous experience of such schemes offered by the insurer, it added.
Irda said insurers should adhere to the conditions of the scheme and also change them according to the changes proposed by the government from time-to-time. An insurer, however, will not be required to file the product if an existing product approved by the regulator was similar to the proposed scheme. It will have to inform the regulator and submit all relevant details.
In case of covering different areas , Irda said the insurer would have to present details of the method of computation of premium, source of data, assumptions and losses and expected losses and profit margins. Also, the regulator has asked insurers to show the certificate given by an appointed actuary on the viability of the rates proposed and the features changed from the previous filing.
