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Soon we may see a motor insurance policy which gets activated only when you go out on your car i.e. you need not pay premium when your car is parked.
IRDAI has allowed health insurers and general insurance companies to follow ‘use and file’ guidelines i.e. they can launch a new policy in the market and apply for approval within a certain time frame later.
With this, both health and non-life companies can roll out new products without taking prior approval of the insurance regulator. So far, companies followed ‘file and use’ norms.
The ‘use and file’ gives flexibility to insurers to launch customized and innovative products and fix up its premium price. It also open gates for bite/sachet size policies, which are issued for specific needs and short duration.
The insurance industry may use this opportunity to expand their offerings to address evolving needs of customers.
In a press release, IRDAI said, “The Insurance Regulatory and Development Authority of India (IRDAI) has extended the ‘Use and File’ procedure for all the Health Insurance products and almost all the general insurance products in line with the reforms agenda taken up towards having a fully insured India. This is a stepping stone towards improving the ease of doing business in the insurance sector by moving from the current regime requiring prior approval for launching the products to a regime where products could be launched without any prior approval.”