Insurance companies may now introduce individual and group unit-linked life and health insurance plans and combo products without first obtaining regulatory approval, according to the Insurance Regulatory and Development Authority of India (IRDAI). The regulator broadens the ‘use and file’ procedure for life insurance products by adding new categories in a June 20, 2023 circular. #
Until now, individual ULIPS offered funds already available and approved were subject to the “use and file” rules. Group ULIPS were excluded from it. The insurers can now ‘use and file’ group unit-linked life and health insurance plans under the revised procedure.
Combi products, which are insurance products with life insurance serving as the lead insurer, have also been introduced by IRDAI. As insurers can now offer bundled products, this move will enable customers to purchase comprehensive insurance health insurance coverage under a single policy. According to the regulator, the insurance companies that provide combo products must adhere to the current standards set forth by IRDAI. The health insurance premium is subject to change based on various factors, and an increase in one’s age is another important consideration. # *
Based on the feedback from the Industry and to facilitate the insurance industry to promote insurance penetration, it has been decided to expand the scope of current use and file procedure.
This is the continuation of several actions the regulator has taken to increase nationwide insurance penetration. This modification will allow insurers to accelerate their time to market, enabling them to meet their customers’ changing needs better.
These recent changes will enable insurance providers and new insurtech players to develop cutting-edge combo products that can satisfy the needs of a sizable population.
According to the circular, the regulator stopped using the Segregated Fund Identification Number (SFIN) clearance procedure for ULIPS. The IRDAI (Investment) Regulations, 2016, as amended from time to time, require insurance companies to adhere to all prudential standards for each segregated fund and the assets under management (AUMs) of unit-linked insurance plans (ULIPS), according to the circular.
IRDAI also permitted new unit-linked funds to be added to existing unit-linked products. According to the regulator, the new fund(s) will be treated as an existing fund(s) for subsequent unit-linked products once they have been added to an existing or new unit-linked product(s). # *
IRDAI’s unwavering dedication to promoting insurance penetration and ensuring the well-being of policyholders is exemplified by the introduction of comprehensive modifications to the current ‘use and file’ procedure for life insurance products. Policyholders will gain from these changes in various ways, including more product options, access to thorough combi products, simplified procedures, and a more comprehensive selection of unit-linked funds. These improvements will increase life insurance’s accessibility and give people the tools to safeguard their future and achieve financial objectives. # *
The integration of health insurance, life cover, and investment opportunities signifies a promising direction in the insurance sector, ultimately benefiting consumers with more holistic and adaptable coverage options.
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#Visit the official website of IRDAI for further details.
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