BIG BOOST for insurance companies by IRDAI! How customers will be impacted - Check key points
Now insurance companies can increase or decrease insurance premium by up to 15 per cent without regular filing process at the IRDAI.
The insurance regulator has issued a circular advising the guidelines on the filing of minor modifications to approved individual health products subject to certain conditions. These minor modifications will be allowed on a certification basis without having to go through the regular filing process."
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The following are some of the key aspects where minor modifications will be permitted:
1] Addition of premium payment options in terms of allowing premium payment in installments;
2] Addition of distribution channels. Eg; if a product has been filed with an intent to sell it through agency channel but it is proposed to also offer it to bancassurance channel;
3] Change in premium rates of +/- 15 per cent;
4] Addition of riders or add-ons to the product;
5] Minor changes in policy wordings;
6] Change in name of product;
7] Change in sum insured options;
8] Decrease or increase in minimum and maximum premiums for the product;
9] Decrease or increase in minimum and maximum entry age; and
10] Addition of critical illnesses.
Speaking on the relief that will get transferred to the insurers Subramanyam Brahmajosyula, Head - Underwriting & Reinsurance at SBI General Insurance said, "Minor modifications such as increasing or reducing the premium, changing the name of a product, offering installment facility for payment of premium have now been made easier since they can be done on the basis of certification instead of going through the full-fledged process of refiling the product. For insureds, one of the main advantages could be in terms of insurers passing on the benefit of reduced premium for a product in a quick time whereas, under the old procedure, it would have taken a long time. Similarly, if any insurer wishes to offer instalment facility for payment of premium, this can now be done quickly."
Subramanyam Brahmajosyula said that if, after a review of the performance of a product, the insurer decides that an increase or decrease in premium is warranted, this can now be done up to +/- 15 per cent as a minor modification without going through an elaborate filing procedure and applying for approval from the regulator.
"Major changes are — increase/decrease in premiums by up to 15 per cent, provision of installment facility for payment of premium, increase in sum insured under the policy and changes in minimum/maximum premium payable under a policy," said Subramanyam Brahmajosyula of SBI General Insurance.
Manikaran Singh, a SEBI registered tax and investment expert said, "The IRDAI move is a welcome step from the corporate point of view as it would give insurance companies to remain in business with a sustained growth rate. however, at the same time, the IRDAI's responsibility becomes bigger as they will have to keep a check on the balance sheet of the insurance companies so that the benefit of their income is passed on to the premium holders on time."