Irdai on Friday extended the 'use and file' procedure for the most of the life insurance products, thereby allowing insurers to launch new products without prior approval of the regulator.
This comes days after Insurance Regulatory and Development Authority of India (Irdai) extending similar relaxations to health insurance products as well as general insurance covers.
In a press release, Irdai said that in its continuous endeavour towards the reform agenda taken up towards having a fully insured India, it has extended the 'use and file' procedure for most of the life insurance products.
"This means now the life insurance companies can also launch these products without prior approval of Irdai," the regulator said.
Earlier when the industry was in nascent stage, it was made mandatory for the insurance companies to take prior approval before launching any life insurance product.
However, with the maturity attained by the industry, it is envisaged that necessary relaxations may be allowed, Irdai said.
"This move will enable life Insurers to launch most of the products (except individual savings, individual pensions and annuity) in a timely manner according to the dynamic needs of the market," it added.
According to Irdai, the relaxation will result in improving ease of doing business for insurers and also lead to expansion of the choices available to policyholders.
"The life insurance industry is expected to use this opportunity to respond faster to the emerging market needs, in terms of designing and pricing of insurance products resulting in more choices for the policyholders, which will further help in increasing the insurance penetration in India," it said.
The life insurers are expected to have a board-approved product management and pricing policy, the Irdai said.
Kapil Mehta, Co-Founder, SecureNow Insurance Broker
This circular follows up on a previous circular for health insurance and some general insurance products. It is an excellent step because the product approval process has been very simplified. The insurers are responsible for new products and need to just inform the IRDAI after launch. The IRDAI has specified the boundaries or principles for all products so that policyholder interests are not compromised. I think this will result in many new life products and variants being introduced.