Insurance regulator moving fast on life insurance product regulation overhaul

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New Delhi, Jul 18: The life insurance industry will soon have a new set of product regulations. Insurance Regulatory and Development Authority of India (IRDAI) has set up a working group for this purpose.
IRDAI had constituted a committee in 2017 for reviewing regulations around life insurance products. This committee had submitted its report in December 2017. To look into the recommendations of that committee, IRDAI is setting up a working group. This nine-member group has representatives from both — IRDAI as well as the life insurance industry.
The working group will look into the recommendations given by the committee and will also look into the feedback from the stakeholders on the report. Post this, a draft product regulations will be prepared by the group.
The insurance regulator in a circular released on Tuesday night said that the working group will meet as often as possible and submit their recommendations to the Member (Actuary) within one month from the date of constitution of the working group.
The report, which was released in December 2017, proposed far-reaching changes for the insurance industry. This included self-regulation by life insurers, higher surrender values, flexible investment policies for insurance and offering loans against unit-linked insurance products, among others.
Also, the committee had recommended a level-playing field in health insurance business for life insurers on par with general insurers and standalone health insurance. This would allow them to sell indemnity-based products, provide value-added services like wellness programmes, offer all-coverage terms and bring parity in commission levels.
To extend the ambit of services provided by a life insurer, IRDAI said that life insurers, like other service providers, should optimise these avenues to increase insurance penetration. This would mean that customers can not only buy policies from life insurers, but will also be able to avail of other services like booking hotel/flight tickets and pay utility bills.