IRDAI vide Ref No: IRDAI/NL/CIR/MISC/95/05/2022 , dated January 12, 2022 has issued Circular on Pricing of products covering Fire and Allied perils (Circular)
Background
The Circular draws reference of the occupancy wise periodical details published by Insurance Information Bureau (IIB) on industry Burning Cost for Fire perils (FLEXA). IRDAI is in receipt of various complaints from policyholders wherein the insurers are referring the Burning cost as ‘mandated minimum rate’. Accordingly, IRDAI has issued clarifications with respect to pricing of products covering Fire and Allied perils.
The summary of clarifications issued by IRDAI is as follows:
- The objective of IIBI publishing details of Burning Costs occupancy-wise is only to give information to insurers with regard to industry-level experience for appropriate use while rating risks, the same does not imply any ‘mandated minimum rate’.
- Insurers to consider all applicable risk factors for rating a risk and give appropriate discounts or charge loading as warranted and the rating approach shall be part of the technical note filed under the Use and File/File and Use procedure.
Source category: IRDAI
Attachments
- /2022/3_2022-01-12_Pricing_of_products_covering_Fire_and_Allied_perils.pdf
- /2022/3_2022-01-12_Pricing_of_products_covering_Fire_and_Allied_perilsPress_note.pdf
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