The Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurance companies to launch group Ulips and combi plans (combination of life and health insurance plans) without seeking prior approval from the regulator under rules introduced last year.
These rules, the so-called use-and-file norms, were so far applicable to individual Ulips offered with existing and approved funds, but not group Ulips. The move will facilitate quicker launch of products in sync with the aim of use-and-file framework introduced last year.
Also read: IRDAI’s Use-and-file framework could mean better products, but policyholders should exercise caution
The use-and-file norms were so far applicable to individual Ulips offered with existing and approved funds, but not group Ulips. Through combi product offerings, life and non-life companies - with the former taking the lead - can offer bundled products. For instance, term insurance and health insurance covers through the same product so as to ensure ease of buying for policyholders.
The modifications to the use-and-file norms were made on the basis of the industry’s feedback and are aimed at deepening insurance penetration in the country, the insurance regulator said in its circular.
Also read: HDFC Bank viral video: Four classic insurance traps you must avoid
IRDAI had last year permitted life, general and health insurance companies to launch life and health insurance products as well as rider benefits without its seeking prior approval.
Until then, insurance companies had to file the products with the regulator before launching them in the market, which led to delays in rolling out the schemes. The IRDAI had said that it expected the insurance industry to use the new, flexible framework to introduce customised and innovative products to give policyholders more options.
The regulator has also decided to do away with the Segregated Fund Identification Number (SFIN) clearance process for Ulips. However, life insurance companies will have to adhere to other prudential and exposure norms under the IRDAI (Investment) Regulations, 2016 for each Ulip segregated fund as well as Ulip AUM.
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