Aiming to provide cover to people in case of defective property titles and related issues, insurance regulator IRDAI today proposed introducing a new product in India, ‘Title Insurance’.
Insurance Regulatory and Development Authority of India (IRDAI) today said it has decided to constitute a 7-member working group to study the scope of ‘Title Insurance’ in the Indian market.
IRDAI’s Senior Joint Director Suresh Mathur has been appointed Chairman of the group and asked to submit report in two months.
The group will study the need and scope for such a product in the domestic market vis-à-vis the existing practices in the international market and identify the insurable risk and define the compensation structure.
It has also been asked to suggest the design of the product and the framework for assessment of risk, pricing, reserving and accounting with actuarial inputs keeping in mind the long term sustainability of the product on standalone basis.
Other tasks assigned to the group include assessing the availability and accessibility of local revenue records, ascertaining the status of digitisation of land records in various states and availability of legal expertise to support the underwriting and claims management efforts of the insurer.
The terms of reference also seek policy wordings in line with Indian conditions, both from content and from legal perspective, and suggesting the mechanism for policy servicing and ascertaining the availability of reinsurance support in the domestic and international markets.
Title insurance products are designed to protect financial interest of real estate owners as well as lenders against defect in the title to a property, liens or other related issues.