Background The Authority has published IRDAI (Insurance Products) Regulations, 2024 ( Product Regulation ), in the Gazette of…

Background

The Authority has published IRDAI (Insurance Products) Regulations, 2024 (‘Product Regulation’), in the Gazette of India, bearing F. No. IRDAI/Reg/8/202/2024 dated March 20, 2024, after repealing the following prescription:

i. IRDAI (Micro Insurance) Regulations, 2015.

ii. IRDAI (Minimum Limits for Annuities and Other Benefits) Regulations, 2015.

iii. IRDAI (Acquisition of Surrender and Paid-up values) Regulations, 2015.

iv. IRDAI (Health Insurance) Regulations, 2016.

v. IRDAI (Unit Linked Insurance Products) Regulations, 2019.

vi. IRDAI (Non-Linked Insurance Products) Regulations, 2019.

The central objective of the Product Regulation is to facilitate faster response of the insurers to 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 Product Regulation are mentioned hereinunder:

1. Applicability: The Product Regulation shall be applicable to the Insurers transacting Life, General, or Health Insurance business in India and shall come into effect from April 1, 2024, which shall remain in force for three years thereafter.

2. Deletion of the term ‘Combi-micro insurance product’ from the General Definition: Previously, IRDAI under the Exposure Draft has included the definition of Combi-micro insurance product. Under the Product Regulation, the definition of Combi-micro insurance product has been deleted.

3. Principles for designing and pricing of Products: The Product Regulation 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 introduced. Insurers have been advised to follow applicable provisions for product designing and pricing set out as under:

• a. Schedule I & III – Life Insurance Products
• b. Schedule II & III – General Insurance Products
• c. Schedule III – Health Insurance Products

4. Product Management & Governance: Every insurer has 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, the constitution of the Product Management Committee (‘PMC’), and the responsibilities of PMC have been introduced.

5. Micro-Insurance Products: The Product Regulation prescribed that every insurer shall issue micro-insurance products to the individual in accordance with the applicable provisions subject to modification specified by the Competent Authority from time to time.

6. 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 introduced.

7. Review of Insurance Products: The Authority has prescribed that the review of all the products, offered for sale shall be done by the Appointed Actuary and the PMC. Further principles for the revision of products have been introduced.

A copy of the Product Regulation is attached herewith for your reference.

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