The insurance regulator IRDAI has proposed changes to fire and allied policy covers in a bid to increase insurance penetration in dwellings, offices, hotels and shops that are susceptible to big economic losses from natural calamities. Micro, small and medium enterprises are also the target of this initiative.
IRDAI has set up a working group to examine the current insurance product structure, reported Press Trust of India. The seven-member panel, headed by Anurag Rastogi of HDFC Ergo General Insurance, has been asked to submit its report within 12 weeks.
It will examine the current product structure under Standard Fire and Special Perils Policy (SFSP) and study the need and scope for changes in the current product structure.
The group has been asked to suggest standard and simple policy wordings, add-on covers, clauses, endorsements to be adopted by the general insurers that adds value to policyholders.
Another task of the panel is to make recommendations for a more relevant regulatory framework, including assessment of risk, pricing, reserving, accounting, etc, for both long-term and short-term policies.
IRDAI Member (Non-Life) P J Joseph said that recent catastrophic events such as floods in north India and Chennai in the south, as well as Cyclone Hudhud in 2014, led to economic losses that were much higher than insured losses.