Asian News - India: New product filing rules to boost general insurance market
Source: Asia Insurance Review | Apr 2016
The insurance regulator’s new “use and file” rules for new general insurance products, taking effect from 1 April, will boost growth in the sector but could also result in price increases in some products. The new regulations allow the marketing of corporate insurance products before regulatory approval, reported Press Trust of India.
“The new system would enable insurers to adapt faster to the requirements of commercial entities. All of these changes are positive, indeed path-breaking,” ICICI Lombard General Insurance Managing Director and Chief Executive Bhargav Dasgupta said.
To adapt to the new system, insurers have asked the industry body, General Insurance Council, to prepare standardised wordings for insurance policies, New India Assurance Chairman and Managing Director G Srinivasan, who is also the chairman of the association, said.
The rules stipulate that general insurers have to operate with a combined ratio of below 100%. As a result, the industry should see rate hardening over a period of time, SBI General Senior Vice President, Marketing and Product Development, Gunjan Ghai said. This would likely improve the profitability of insurers as a whole, he added.
Mr Sasikumar Adidamu, Chief Technical Officer (Non-motor) at Bajaj Allianz General Insurance, said that under the new rules, pricing would require actuarial and technical justification that has to be approved by a product management committee, a special committee to be formed by the concerned insurance company.