A new set of regulations for the life insurance product may soon be a reality. The Insurance Regulatory and Development Authority of India (IRDA) has put together a working group for this regulation overhaul.
In 2017, the IRDAI had constituted a committee that reviewed regulations pertaining to life insurance schemes. A report was submitted by this committee in December 2017 as well. The insurance regulator is now looking to review the recommendations of the committee.
The new working group formed is a 9-member committee that has representatives from the life insurance domain and the IRDA. This group will review the recommendations of the committee and also provide feedback on the report based on the stakeholders’ perspective. After this, a draft of the product regulations will be created by the committee.
IRDA mentioned that the working group will meet frequently and submit its recommendations to the actuary within a timeframe of one month from the constitution date of the group.
Recommendations in the report
The report that was released in December 2017 had several far-reaching changes for the life insurance sector. Some of these proposed changes are increase in surrender values, self-regulation by life insurance companies, flexibility in investment policies, and loan offers in unit-linked insurance plans.
The committee had also made a recommendation for a level playing field for life and general insurers. This is expected to help life insurance companies sell indemnity products, offer value-added services, and bring about uniformity in commissions.
IRDAI mentioned that life insurance companies should improve penetration of insurance products by enhancing the type of services offered. This implies that customers should be able to purchase life insurance policies, pay utility bills, and book hotel tickets from the same service provider.