Insurance regulator IRDA has overtime brought in multiple regulatory changes to make them more customer friendly. Recently, the insurance regulator came out with another such change to ease the process for making minor changes in existing policies.
"Currently, insurance companies have to follow the complete filing process in case they have to make a modification in the existing approved product. The minor modification ruling is a welcome move. It simplifies processes and empowers insurers to make minor changes in existing policies with ease," says Shanai Ghosh, CEO Designate, Edelweiss General Insurance.
These changes are generally introduced on the basis of consumer feedback.
"Minor modifications that insurers initiate after feedback from customers can now happen much quicker. This includes additional frequencies of premium payment and add-on riders," says Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance Company Limited.
Following are some of changes that IRDAI has allowed insurance companies to implement in the existing policies using the certification method:
- If an insurance company wants to add premium payment options with existing policies, it can do it now. Right now, only health insurance companies offer an annual premium payment option. Now, insurers can give quarterly or monthly payment options as well. This will help more people buy health insurance as smaller premium will increase affordability.
- Changes in base rate premium not exceeding +/- 15 per cent of the premium can be done.
"This is a welcome move by the regulator as it enables insurance companies to make modifications in short notice and introduce them in the market. For example, if a product has been performing well for an insurer and it decides to pass on the benefit by way of reduced premiums to the customer, it can be done quickly now. Similarly, if there is a requirement to increase the maximum entry age for a product (the maximum age at which a customer can first purchase the policy) the same can be done without going through the normal filing procedure," says Subramanyam Brahmajosyula, Head - Underwriting and Reinsurance, SBI General Insurance.
- Now, insurers can also add approved standalone riders or add-ons with approved individual health insurance products. Also, features such as addition of critical illnesses under benefit -based products and expansion of list of day care products are some of changes that can be easily introduced in existing policies.