New term policies don't need IRDAI nod

New term policies don't need IRDAI nod

In News:

• Life Insurance companies can introduce a variety of new offerings, including term insurance plans, as well as connected ones, without needing approval of the Insurance Regulatory and Development Authority of India (IRDAI).
• In the past, when the market was still just beginning to emerge it was obligatory insurers to obtain prior approval from IRDAI prior to launching any new policy in the field of life insurance.

The contents of today's news article:

• About IRDAI (Objective, Functions, Role & Importance)
• News Summary (about the 'use and file' procedure)

About Insurance Regulatory and Development Authority of India (IRDAI):

• It was created as an autonomous organization pursuant to the IRDA Act, 1999.
• Goal Goal: To safeguard the interests of policyholders to regulate, encourage and assure the growth of the insurance industry, and related matters relevant to it.
• IRDA is the supreme body that oversees and oversees insurance industry in India.
• Nodal Ministry: Ministry of Finance

Functions:

• In order to protect the interest of the policyholder while providing fair and equitable treatment.
• To ensure fair regulation of the insurance sector while making sure that the financial stability of the relevant laws and rules.

• Registration and regulation of insurance companies;
• Establishing norms and licensing for insurance intermediaries
• Promotion of professional insurance organisations;
• Supervising and regulating the terms and rates of non-life insurance policies;
• Specificating the financial reporting requirements of insurance companies.
• Regulation of the placement of the funds of policyholders by insurance companies.
• Assuring the stability of the solvency margins for insurance companies.
• Insuring that insurance coverage is available in rural areas and for the most vulnerable segments of society.

News Summary:

• The insurance regulator IRDAI has recently extended the "use and file" process for the majority of life insurance products and allowed insurance companies to launch new products with no previous approval.
• The IRDAI had previously granted similar relaxations to Health insurance products and general insurance policies.
  • However it's true that the "use and file" system is not permitted for individual savings plans, pensions for individuals and annuity schemes..
• The "use and file" system is utilized by non-life regulators around the world.

Potential Benefits of "Use and File" Procedure:

• "Use and file" is a procedure that allows "Use and File" procedure permits insurers to introduce an insurance product and submit its information to an authority.
• This can help in avoiding the long wait time when providing innovative insurance solutions for customers to address the changing world.
• This is an initiative by IRDAI that will offer essential mechanisms for insurance companies that want to launch more creative products to the market at more frequently.
• According to IRDAI the relaxation could improve the working conditions for insurance companies and result in the expansion of options available to policyholders.

 

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