As per IRDAI guidelines, life insurance companies can now offer individual and group unit-linked life under File and Use system. Life insurance companies have also been allowed to offer combi plans of life and health insurance plans without the need for prior approval from the regulator. This recent update is an expansion of the scope of the file and use procedure by including additional categories of life insurance products.
Earlier, the file and use rules only covered individual unit-linked insurance plans (ULIPs) available with approved funds. Group ULIPs and Combi Plans were not included in this process. With this new update, the insurer will get a lot of flexibility as they can now introduce innovative products in the market while ensuring a competitive advantage. The insurance industry is growing quickly in India as more and more people are getting aware and IRDAI is taking proactive steps to support Insurance Industry with speed and flexibility.
It is a great opportunity for the insurance industry that will allow insurers to introduce customized and innovative products and expand the choices for policyholders, addressing the evolving market needs.
Use and file system
Under the use and file system, insurance companies are allowed to promote and sell products without prior approval from the regulator. This supports the insurance industry in launching products at a fast pace.
The scope of the file and use system has been further supplemented by adding two new categories i.e
Group Ulips: Saving linked products to be offered to a group where saving corpus will be used in market-linked instruments and policyholders would accumulate units with NAV.
Combi Plans: Here, term and health insurance can be paired together, giving a comprehensive solution for policyholders.
Benefits of the New Norms
Insurance Companies can offer product solutions as per market dynamics and prospects will have better options.
The Indian insurance market is seeing regular changes and is one of the fastest-growing markets today. The government has big plans for the market; thus, we will keep on seeing new updates in this journey that will increase insurance penetration in the country.
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