General insurers want to use products before filing them

MUMBAI: General insurers in India are planning to break free from the custom of filing a product and then selling it to big corporates, as that cripples the freedom to tailor a product that would suit a company. The General Insurance Council, a representative body of non-life insurers, including Reliance General and ICICI Lombard, is working with Insurance Regulatory and Development Authority ( Irda) to ensure the hassle of filing and re-filing is done away with, and the practice does not lead to dubious sales pitch that may come back to haunt them.

“We have given a conceptual paper on use and file,” said R Chandrasekaran, secretary-general at General Insurance Council. “We want Irda to accept the concept paper and rephrase the file and use guidelines for innovative products, which are mostly reinsurance driven.” Irda’s concern is policyholder’s protection, said Chandrasekaran.

While price has been freed, wordings have not been freed, he said. Large insurance policies, which are reinsurance driven, can be tested in the market and later filed with the regulator. This will reduce the hassle of filing the policy, waiting for approval and then going back to the regulator with changes made by the company. On an average, the insurance regulator takes 3-6 months to approve a product.