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The Insurance Regulatory and Development Authority (Irda) has said it will approve products under the use-and-file regime. However, insurers said that not many products have been filed under this norm since there is some uncertainty over standardised rules for this category.
Presently, Irda follows the file-and-use route under which all products have to be filed with the regulator before being launched in the market. However, the use and file norms would entail that the insurance company could launch a product for sale in the market if it adheres to certain standard guidelines and has standard nomenclatures. Only a declaration on the same will have to be presented to Irda.
Insurers are not very enthusiastic about this idea since this would curb innovation in product design. “While use-and-file would mean quick approvals there would be no scope for introducing varied products since we have to follow standard norms,” said the senior vice president of a private life insurance firm.
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Irda chairman T S Vijayan had earlier said that they 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.
Life insurers also said that the terms and conditions of approval under this regime were not clear. The chief executive of a mid-size life insurance company said that though only simple endowment and term products may be sold under use-and-file, the policy wordage and features are still being debated upon.
Last year, under J Hari Narayan’s regime, Irda had suggested use-and-file method of product approvals so that simpler products could be introduced in the market in a quicker manner.
