Product approvals slower as IRDAI focuses on big-bang regulations

Product approvals have been slower this year with the Insurance Regulatory and Development Authority of India (Irdai) being busy with new regulations to implement the Insurance Laws (Amendment) Act, which was passed by Parliament in February this year.

“Not more than one to two products of insurance companies have been approved this year,” said the regulator appointed actuary at a private life insurance firm.

With the Bill being approved by both Houses of Parliament, the sector has got several new norms. As many as 40 regulations would undergo changes or be replaced with fresh regulations in the next few months.

Already, several new regulations pertaining to management control, opening of reinsurance branch offices, solvency margin, investments, issuance of capital, expense management, corporate agency and electronic repositories have been brought out. Some of these are at a draft stage and will be finalised after considering industry comments.

During recent interactions with regulatory officials, executives from the sector said companies should get adequate time to adopt the new norms conforming to the Bill. In the past, there have been instances when insurers were given only a few weeks to implement norms.

The sector had also faced issues with product approvals when positions such as member-actuary and member-life remaining vacant. However, after these posts were filled, approvals had begun to speed up.

Industry officials said by the end of December, the regulator would be ready with most of these new regulations. After this, product approvals could pick up pace. Earlier, there was a directive by Irdai that if an insurer files more than five products in a year, detailed explanations would be required.

CHANGE IN THE AIR

  • With the insurance Bill being approved by both Houses of Parliament, the sector has got several new norms
  • Not more than one, two products of  insurance companies have been approved this year
  • As many as 40 regulations would undergo changes in next few months
  • Industry officials say the regulator would be ready with most of these new regulations by December

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