The domestic insurance industry is concerned about the slowing speed of product clearance in the life insurance segment. Market players believe that around 80-100 products are pending with the Insurance Regulatory and Development Authority of India (Irdai) since past few months for their approval.
While market players feel that, products should get fast approval so that it can reach more and more investors, insurance regulator believes that, delay in clearing proposal might be only due to the complexity of the products filed by the insurers.
“I don’t know the exact number of proposal pending at Irdai. But we might not have cleared some due to its complexity. If there are simple products we clear it quickly,”
Irdai chairman T S Vijayan said on the sidelines of 17th annual Insurance Conference organised by Federation of Indian Chambers of Commerce and Industry (FICCI).
Industry players believe that, the delay is largely due to the change in the Insurance Amendments Act, which has triggered a lot of the procedure requirement as several departments of the regulator were busy bringing out those regulations.
A CEO of a top insurance company said, “Last year, a number of products got approved quickly. In recent times, they have been busy with regulations triggered by the amendment of Insurance Act and hence the product approvals are not as quick as before.”
According to the latest list of life insurance products released during the financial year 2015-16 by Irdai shows that, there are numerous product offers from several insurance house. “Things were better in the first few months of 2015, but in the last few months they have not been able to clear many proposals. I also think that regulator had in the early 2014 asked life insurers for a product planner before every financial year. Irdai had said if the number of products exceeds five, the insurer should furnish supporting market research, product-wise persistency for new offers. This might be also one of the reason for delay in clearing new products,” said another senior official from leading fund house.
However there are players who feels that, though the speed of clearing new products is slow, but far better than what it used to be few years ago.
“If we go back to past few years, it used to take months to clear a simple product offer. But now situation has improved and we get clearance within two-three months.
Typically new product which isn’t much complicated should get cleared in 45 days,” said a CEO of large-sized insurance company.