Companies can introduce a product in the market and then file with the Insurance Regulatory and Development Authority of India (Irdai) for approval. Companies till now needed Irdai’s approval before launching products but the process was delayed. Product approval would sometimes take around three months.
“This move will facilitate the insurance companies to design and launch innovative products for these segments in a timely manner and expand the choices available to the policyholders”, said Irdai in a statement on Thursday.
“Agriculture and allied activities constitute one of the largest sources of livelihood in India. Also, the adverse impact of natural catastrophes on the vulnerable segments of society is enormous and underlines the need to design and offer suitable insurance products for their protection.”
Irdai has extended the “use & file” procedure to most life insurance products, barring individual savings, individual pensions, and annuity products.
The rationale behind introducing the “use & file” procedure for most products is that the industry has matured hence it does not make sense to get the regulator’s prior approval before launching every product.