Let’s Connect

IFSCA (Insurance Products and Pricing) Regulations_ 2022

IFSCA vide ref No: IFSCA/2022-23/GN/REG029, has published “(Insurance Products and Pricing) Regulations, 2022” (Regulations) on January 16, 2023. The said Regulation shall come into force from the date of its publication in the Official Gazette.

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.

Major highlights of the Regulations are as follows:

  • The Regulation shall be applicable to IIOs excluding those engaged in transacting of re-insurance business.
  • The Regulation specifies compliances pertaining to Product Approval Process. Some of the key provisions are as follows:
  • An IIO shall have a Board approved ‘Product Oversight and Governance Policy’ (Policy)in place which shall contain provisions related to:
  • methods and processes for designing, approval, monitoring, reviewing and distribution of insurance product
  • corrective steps to be taken for insurance products that are detrimental to the interest of prospects or policy holders

All products to be designed in accordance with the said Policy

  • The policy wordings shall be submitted to the Authority before marketing any insurance product, other than re-insurance product including modification or revision of the product in the manner as may be specified by the Authority
  • No approval for an insurance product is required from the Authority, unless so specified.
  • IIO shall consider following while designing, marketing or distributing an insurance products:
  • objectives, interests and needs of the prospect
  • terms and condition of the product not adversely affecting the interest of prospect
  • management of conflict of interest, if any, with the intermediary or insurance intermediary involved in distribution of the products
  • The product shall be tested appropriately before marketing/adopting and in case of significant change in the target market.
  • The Regulation specifies compliances pertaining to Product Management. Some of the key provisions are as follows:
  • The insurance product shall carry the IIO’s name and product’s name in all pages of all the documents and shall not market any insurance product without allotting a Unique Identification Number (UIN)
  • An IIO shall devise its own methodology / algorithm for issuance of UIN and shall submit the same to the Authority Existing IIO’s to comply with above stipulation within one month from the date of notification of these Regulations
  • The Authority shall be informed about withdrawal of an insurance product at least 3 months prior to the date of withdrawal. Existing policy holders shall be informed at least 3 months prior to the expiry date of its policy
  • An IIO may cancel the insurance policy mid-term only on the grounds of fraud, misrepresentation or moral hazards.
  • The Regulation specifies compliances pertaining to Policy Servicing, some of the key provisions are as follows:
  • An IIO shall create and maintain proposal forms either in physical or in electronic mode and in accordance with its ‘Product Oversight and Governance Policy’ Information captured in physical form to be converted in electronic form;
  • The proposal form shall have a provision to capture the electronic Insurance Account (eIA) number, if available;
  • Creation of eIA shall be facilitated for the prospects willing to get the electronic policy through the Insurance Repository System
  • IIO shall issue electronic policy wherein the sum assured is more than USD 100 and/or premium is more than USD 10, whichever is lower;
  • An IIO shall issue the electronic policy to the policyholders directly or through the registered insurance repositories;
  • An IIO shall collect fee not more than USD 5 (USD Five only) for granting acknowledgement of notice of transfer or assignment of the insurance policies issued by it (including e-insurance policies).

An IIO shall comply with regulatory framework on referral arrangements between the IIO and the referral entity, as may be specified by the Authority

Source category: IFSC Insurance Office

Attachments

  • /2023/145_IFSCA_(Products_and_Pricing)_Regulations_2022.pdf

Comments are closed