Removal of pre-approval for life cover products will push innovation

IRDAI’s decision to do away with pre-approval for launch of life insurance products will go a long way in providing ease of business, innovation in the industry, according to experts.

The regulator had recently, permitted life insurers to launch products without prior approval. The move will enable the launch of most products (except individual savings, individual pension and annuity) in a timely manner according to the dynamic needs of the market, according to the regulator.

“This is a forward looking and progressive move for the industry as the principle-based approach encourages insurers to be more responsible and innovative in their product designs. It will add momentum to the insurance sector, both in terms of designing and pricing,” Subhrajit Mukhopadhyay, Executive Director, Edelweiss Tokio Life said.

This will significantly improve the time to market, thus, enabling insurers to respond to the dynamic needs at a quicker pace, he added.

The nod, however, comes with certain conditions that the insurers should put in place a board-approved policy on product and pricing. “This makes management of insurance companies more disciplined and steps on focus on corporate governance,” said Vice-President of a private life insurer.