New IRDAI rules for designing, pricing of general insurance products

The proposed regulations provide the basic framework and reflect the fundamental principles to be followed in respect of product design and pricing, said Insurance Regulatory and Development Authority of India (IRDAI).

New Delhi: In a bid to protect the interest of policyholders, insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) has come out with draft regulations for the designing and pricing of general insurance products.

The proposed regulations provide the basic framework and reflect the fundamental principles to be followed in respect of product design and pricing, said IRDAI.

The IRDAI (General Insurance Products) Regulations, 2021, which will apply to insurance products as well as add-ons, are aimed at promoting efficiency in the conduct of the general insurance business, said the draft on which the regulator has invited comments from stakeholders by April 26.

In order to provide better pricing and service to its insurance policy for customers in health insurance and motor insurance, the insurance regulator IRDAI has issued new rules for product filing of general insurance companies in which insurance companies are required to claim their policy premiums related to claims and risk data.

Companies can also be asked to revise prices if IRDAI does not agree, these rules will be beneficial for common policy holders because transparency will come in the policy and companies will have to justify their terms to the regulator.

These are the highlights of insurance policy design, pricing new rules

- New product filing guidelines for general insurance companies

- New guidelines for designing and pricing an insurance product

 - Companies will have to justify the pricing of the policy

- Transparency in policy will give better pricing to policyholders

- The company will have to revise if IRDAI is not satisfied with the product pricing

New guidelines to protect the interests of policy holders

- Policy design should include the affordability associated with the policy holders.

- Technical data should also be appropriate in the design of policy related add-on products

- Companies should include claims and other risks in the pricing of the policy in a fair way