Irdai looks to simplify approval process for online products

Mumbai: The Insurance Regulatory and Development Authority of India (Irdai) is planning to simplify the approval process for online insurance products.

A senior life insurance executive said that soon the industry would have a different process of 'file and use' for online products, so that approvals can be quicker and more such products can be put online for sale in a shorter time-frame.

Insurance products follow the 'file and use' procedure wherein a product has to first be sent to the regulator who approves the product features and pricing, after which it can be brought to the market for sale.

"Offline products take atleast four to six months to be approved. The same process may not be viable for an online insurance market where customers look for new products and riders on a regular basis. Hence, the portfolio requires to be updated every few month," said the head of products in a mid-size life insurance company.

For the customers too, the proposal form would get much simpler with fewer questions, so that the turnaround time to buy insurance is considerably reduced.

The regulator has also constituted two groups, one in life insurance and one in general insurance to explore opportunities in the e-commerce sector. While digital signatures are a grey area where there is no proper clarity on whether they can be used, the regulator is expected to bring out clarifications.

In a circular, the regulator has said that they are inclined to facilitate the promotion of e-commerce in insurance space, which will lower the cost of transacting insurance business and bring higher efficiencies and greater reach.

The two groups will look into identifying opportunities, recommend technological solutions for e-commerce in the insurance sector, suggest regulatory and other facilitation measures.

In the life group, members include Sandeep Bakshi, CEO, ICICI Prudential Life, a Life Insurance Corporation of India representative, Pramod Khanna, Hero Corporate Services, Jignesh Gandhi, NSDL Insurance Repositories and Gautam Kumar, Deputy Director, Irdai will be the convenor.

The members of the general insurance group would consist of Tapen Singhel, CEO, Bajaj Allianz General Insurance, New India Assurance representative, Tarun Samant, CEO, Tata Motors Insurance Brokers, S V Ramanan, CEO, CAMS Insurance Repository and N M Behara, Deputy Director, Irdai will be the convenor.

Life insurers said that reforms in the sector are needed including allowing commissions for online products and allowing use-and-file in this space.

"Online market is distinct from offline space. Based on customer feedback, we should be allowed to tweak product pricing and features in online products," said the chief executive of a life insurance firm.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.