International Financial Services Centres Authority (IFSCA or Authority) vide its Press Release dated November 18, 2022 has sought comments / suggestions from general public and stakeholders on the proposed IFSCA (Insurance Products and Pricing) Regulations, 2022 (“proposed regulation”).
Background – The IFSCA by virtue of the proposed regulation proposes to strengthen the insurance eco-system and encourage retail participation in insurance sector at IFSC.
Objective – To provide framework for designing and pricing of insurance products, ensure effective internal controls & systems to identify & mitigate risk and to protect the interest of policyholders.
The major highlights are as below:
- The draft Regulations specifies key definitions such as e-Insurance Account, e-proposal, e-insurance policy, insurance product etc.
- The draft Regulations primarily covers provisions pertaining to Product Approval process, Product Management and Policy Servicing.
- The proposed Regulation specifies compliances pertaining to Product Approval Process’, some of the key provisions are as follows:
- Board approved ‘Product Oversight and Governance Policy’ specifying the methods and processes for designing, approval, monitoring, reviewing and distribution of insurance product which shall be submitted to the Authority before marketing the product, except re-insurance product.
- While designing, marketing or distributing of insurance products the IIO shall take into account the objectives, interests and needs of the prospect and proper conflict management, if any with the intermediary or insurance intermediary engaged for distribution of the products
- IIO shall examine the product appropriately and conduct scenario analysis wherever required.
- The proposed Regulation requires the IIO to ensure compliances pertaining to ‘Product Management’, certain important provisions are as follows:
- To mention IIO and product name in all the pages of the product related documents.
- To allot Unique Identification Number (UIN) before marketing the product, in case of modification of existing product, a separate UIN to be allotted.
- To devise methodology/ algorithm for issuance of UIN which shall be submitted to Authority within 1 month from official publication of these regulations.
- In case the IIO proposes to withdraw insurance product, the Authority shall be informed atleast 3months prior to the scheduled date of withdrawal of the product.
- The existing policy holders shall be informed atleast 3 months before expiry of policy withdrawal of the insurance product.
- The Mid-term policy can be cancelled only on the grounds of fraud, misrepresentation or moral hazard.
- In terms of the Policy servicing the IIO shall ensure compliances inter alia but not limited to:
- Creating and maintaining proposal form in physical as well as electronic form, also having necessary arrangements for converting physical form to electronic form.
- Have provision in the proposal form to capture electronic Insurance Account (eIA) number.
- Facilitating creation of eIA number to prospect in case where policy is issued electronically.
- Issuing electronic policy where the sum assured is more than USD 100 and/or premium is more than USD 10, whichever is lower
- The proposed Regulation also requires the IIO to comply with the requirements as prescribed within 1 month from the date commencement of the regulation.
Source category: IFSC Insurance Office
Attachments
- /2022/112_IFSCA_(Insurance_Products_and_Pricing)_Regulations,_2022.pdf
- /2022/112_PRESSR~13.PDF
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