IRDA working on 10 standard insurance products
New Delhi: Sector regulator IRDA on Wednesday said it will develop 10 standard products in consultation with industry bodies which can be launched by the insurance companies without seeking regulatory nod.
"For 10 products we will try and work (to develop standard products). We will have to work closely with Life Insurance Council and General Insurance Council to see if we can develop such products," Insurance Regulatory and Development Authority (IRDA) Chairman J Hari Narayan said.
Earlier this week, Finance Minister P Chidambaram had said that the IRDA will come out with a policy to accord automatic clearance to the standard life insurance products.
"Use and File system may be introduced. IRDA, in consultation with insurers, will identify or design certain standard products which can be used by the industry under Use and File system, if the insurance company complies with the conditions attached to the standard product," Chidambaram had said.
Hari Narayan said that the persistence level is very low in the insurance industry and there was a need to bring in complete understanding of the market and insurance companies.
Persistence level refers to client retention by insurance companies.
He said 'Use and File' would not be in the general interest of the policyholders since persistence ratio is high.
"The point is, the insurance industry requires to stabilise, they have to mature in their approach and I would say they are getting there but there is still some distance to go and in that context what we have agreed is that the regulator and the insurance industry will design jointly say about 10 products," Hari Narayan said.
To another query on allowing insurance companies to invest beyond 10 percent in debenture and equity, he said: "One of the recommendations which is there in the amendment bill, which is in the consideration of Parliament, is that matters regarding the pattern should not be encased in the bill but should be managed by regulation by the authority".