INDIA – IRDA misses deadline for setting guidelines on standardized products

 The Insurance Regulatory and Development Authority (IRDA) is likely to miss the November 30 deadline set by the government for the final guidelines on standardized products for the insurance sector. 

The 12-point agreement which the IRDA reached with the government in order to provide fillip to the industry is still in progress. 

“Work groups have been formed but the work is not happening as fast as one would have liked and it is not going to be completed in the near future,” said the head of a leading insurance company who did not wish to be identified. The IRDA formed various work groups that included actuarial and other officials from several insurance companies to standardize 18 products so that “use and file” system could be introduced. Once the standardized products are framed, companies filing products based on it would automatically be deemed to have been approved after 15 days of intimation to IRDA. 

The difference in the products filed by companies will be on account of the premiums and money back amount in case of money back plans and the basic structure would remain the same. 

Finance minister P Chidambaram in his statement on October 1 said, “IRDA will lay down guidelines on the principles underlying the design of any insurance product. Based on the recommendations of the working group that has been set up, IRDA will issue draft guidelines and after consultations final guidelines will be issued by the end of November, 2012.” 

 P CHIDAMBARAM , INDIA’S FINANCE MINISTER