New Delhi: Regulator Irdai has started the process to standardise 'title insurance' with an aim to promote the product which provides indemnity to property buyers against loss arising from defects in title deeds.
Towards this, the Insurance Regulatory and Development Authority of India (Irdai) has set a working group to revisit the product structure of title insurance, a circular said.
Obtaining title insurance has been made mandatory for promoters/developers under the Real Estate (Regulation and Development) Act, 2016.
Currently, the product is offered by only a few general insurers in the Indian market.
However, each insurer's product features vary in policy terms and conditions, and scope of coverage based on the support received from their reinsurers.
Irdai said that the number of title insurance policies sold are minimal despite the availability of product for the last one-and-a-half years.
"The feedback received from the Government of India reveals that the stakeholders, especially the developers associations have flagged the need for standardisation in the title insurance products," Irdai said while setting up the working group.
The 12-member panel headed by T L Alamelu, Member (NL), Irdai, has been asked to examine the legal and regulatory framework in place and its impact on the marketability of the product in India.
It has also been asked to "study the structure of title insurance products available in the current Indian market and analyse the reasons for sluggish demand".
Besides, it has been tasked to develop a standard title insurance product suitable to Indian market and recommend measures to spur the demand for the product.
The group has been asked to submit its recommendations within 12 weeks.