The Authority had directed the Councils to constitute a Regulation Review Committee (RRC) to enhance the ease of…

The Authority had directed the Councils to constitute a Regulation Review Committee (RRC) to enhance the ease of doing business and simplify regulations by moving towards a principle-based regime to make them more effective. The RRC recommended IRDAI (Insurance Products) Regulations, 2023 after repealing the following existing prescription:

• IRDAI (Micro Insurance) Regulations, 2015.
• IRDAI (Minimum Limits for Annuities and other benefits) Regulations, 2015.
• IRDAI (Acquisition of Surrender and Paid-up values) Regulations, 2015.
• IRDAI (Health Insurance) Regulations, 2016.
• IRDAI (Unit Linked Insurance Products) Regulations, 2019.
• IRDAI (Non-Linked Insurance Products) Regulations, 2019.

The Authority has issued a Draft on IRDAI (Insurance Products) Regulations, 2023, dated December 12, 2023, bearing reference no: IRDAI/ACTL/Product_Regulation/2023-2024 for comments and suggestion from stakeholders. The main objective of proposed Exposure Draft is to facilitate faster response of the insurers to the emerging market needs, to improve insurance penetration, and to protect the interest of policyholders by enabling the insurers to adopt good governance.

Major highlights of the Exposure Draft on Insurance Products

1. Principles for designing and pricing of Products: The Exposure draft prescribed principles under which the products have to be developed. Apart from the same, three different Schedules for Life, Health, and General, containing the principles and criteria for pricing for insurance products have been proposed.

2. Micro-Insurance Products: The Exposure Draft prescribed the conditions, criteria, and general features of Microinsurance products, including that Every insurer shall issue insurance contracts to the individual micro insurance policyholder in the languages and that Life insurers, General or Health insurers may offer Combi micro insurance products by having tie-up between them subject to compliance with Section 64VB of the Act.

3. Product Management & Governance: Every insurers have been required to have a well-documented policy covering all areas of product design, underwriting, advertisement and overall management of the insurance product and the policy must be approved by its Board, which shall be reviewed periodically by the Board. Further, provisions related to product management, constitution of Product Management Committee, and responsibilities of PMC have been introduced.

4. System and control: In terms of system and control, the procedure for approval of products by the PMC, oversight principles of the insurers, and establishment of mechanism for prevention, identification, monitoring and mitigating frauds have been proposed.

5. Review of Insurance Products: It has been proposed that review of all the products, offered for sale shall be done by the Appointed Actuary and the PMC. Further principles for revision of products have been proposed.

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