IRDAI had constituted a Committee for designing of a combi product for Micro-insurance (“MI”) in February 2020. The report of the Committee has now been published by IRDAI vide its communication dated April 29, 2022 (Report).
The Report focuses on the following areas:
- Objective of MI, market penetration of insurance, major issue for potential customers, steps for making MI a success and it’s beneficial impact.
- Regulatory Framework – India and other foreign jurisdictions
- Concept of Combi product and Standard Combi MI Product
- Underwriting, servicing, distribution and marketing related aspects of MI product.
Summary of the key recommendations
- To have a Combi MI product while following modular approach using various permutations and combinations.
- Standard modules as recommended by Committee may be referred and the product may be sold either on individual basis or group basis.
- Product(s) may be solicited by all distribution channels authorized to distribute insurance products by IRDAI including on-line mode, wherever feasible.
- Underwriting and servicing of the product be done through the use of seamless technology with prior agreement amongst Insurers.
- Use of technology to develop a common technological platform with the involvement of the Life Insurance Council and the General Insurance Council for ensuring uniformity and efficiency in product administration.
- Combining the MI product with various Government schemes at the Central and State level to increase the outreach of the product and also make it easier to convince the target groups about the benefit of insurance protection.
- Creation of awareness by the insurers in conjunction with the various distribution channels and Government agencies is necessary with a special focus to achieve increased insurance penetration.
- Suggested maximum sum insured limits and details of cover against each module has been specified for reference.
Source category: IRDAI
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