The Insurance Regulatory and Development Authority of India (IRDAI) has released Circular No. IRDAI/ACTL/CIR/PRO/135/06/2023, exercising its powers under the Insurance Regulatory and Development Authority Act, 1999. The circular aims to expand the scope of the ‘Use and File’ procedure for life insurance products, based on industry feedback and to promote insurance penetration. This article provides an analysis of the modifications made in the circular and their implications for life insurers.
Analysis: The circular introduces several modifications to the existing filing procedure for life insurance products. These modifications include:
1. Inclusion of Individual & Group unit-linked life & health insurance products: Para No. 10.4 of Section B of Chapter I is substituted to include individual and group unit-linked life and health insurance products. This expansion allows insurers to use and file these products under the modified procedure.
2. Introduction of Combi products: A new para 10.10 is added to Section B of Chapter I, which allows the filing of combi products where the life insurer is the lead insurer. However, these combi products must comply with the existing norms set by IRDAI.
3. Removal of SFIN clearance process: The current SFIN (Standardized File Identification Number) clearance process by IRDAI is dispensed with, as mentioned in new para 11.3.3. However, insurers are still required to comply with the provisions of Para 4.15 (a) (1) (2) and (3) of the Investment Master Circular, which contains prudential and exposure norms for segregated funds and ULIPs.
4. Addition of new unit-linked funds: A new para 14.8 is added to Section C of Chapter I, allowing the addition of new unit-linked funds to existing unit-linked products. These modifications must comply with Para 11.3.3 mentioned above. The new funds will be treated as existing funds for subsequent unit-linked products.
Conclusion: The expansion of the “Use and File” procedure for life insurance products through Circular No. IRDAI/ACTL/CIR/PRO/135/06/2023 brings significant changes to the filing process. Insurers can now use and file individual and group unit-linked life and health insurance products, as well as combi products. The removal of the SFIN clearance process streamlines the filing procedure, while compliance with investment regulations and exposure norms remains essential. The addition of new unit-linked funds provides flexibility for insurers, ensuring the smooth introduction of new products in the market. These modifications aim to facilitate the insurance industry and promote insurance penetration in India.
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Insurance Regulatory and Development Authority of India
Press Release
23.06.2023
Life Insurance products approvals made easy
ULIP and Combi products under ‘Use & File’ Insurance Regulatory and Development Authority of India has extended the ‘Use and File’ procedure to Group Unit-Linked Insurance products, Individual Unit-Linked Insurance products which are offered with new funds and Combi products wherein Life Insurer acts as the lead.
Now, the life insurers can launch these products without prior approval, enhancing ease of doing business and encouraging swift response to the market demands. This will boost innovation in the products resulting in better choices for the customers.
This comes after the extension of ‘Use & File’ procedure for all Term Insurance products, Individual Unit linked products with existing funds and Non-Linked Group Insurance products in October, 2022.
Full Text of the Circular is as follows:-
Insurance Regulatory and Development Authority of India
Circular No. IRDAI/ACTL/CIR/PRO/135/06/2023 Date: 20.06.2023
To,
All Life Insurers
Subject: “Use and File” Procedure for Life Insurance Products
Ref: (a) IRDAI/ACTL/CIR/PRO/081/3/2023 dated 31st March 2023
(b) IRDAI/ACTL/CIR/PRO/207/10/2022 dated 4th October 2022
1. This circular is being issued in exercise of the powers conferred by Section 14 (2) (e) of the Insurance Regulatory and Development Authority Act,1999.
2. Based on the feedback from Industry and in order to facilitate the insurance industry to promote insurance penetration, it has been decided to further expand the scope of current Use and File procedure.
3. In partial modification of Circular on filing of products/Riders for Life Insurance Business issued vide Ref no. IRDAI/ACTL/CIR/PRO/207/10/2022 dated 4th October 2022 the following modifications are made:
3.1.Para No. 10.4 of Section B of Chapter I is substituted with: Individual & Group unit-linked life & health insurance products.
3.2.New para 10.10 added after para 10.9 of Section B of Chapter I: Combi products, where life insurer is a lead insurer and such Combi products shall comply with the extant norms.
3.3.New para 11.3.3 added after para 11.3.2 of Section B of Chapter I: The current SFIN clearance process by IRDAI is dispensed with. However, insurers shall comply with the provisions of Para – 4.15 (a) (1) (2) and (3) of the Investment Master Circular Ref: IRDA/F&I/CIR/INV/226/10/2022 dated 27.10.2022 which contains among others all prudential and exposure norms as per Regulation 9 of IRDAI (Investment) Regulations, 2016 as amended from time to time at each segregated fund, as well as AUM of ULIP.
3.4.New para 14.8 added after para 14.7 of Section C of Chapter I: Addition of new unit linked funds to existing unit linked products. The modifications permitted under this clause shall comply with Para 11.3.3 of Section B of Chapter I, as mentioned under Para-3.3 above. Once the new fund(s) is/are added to existing or new unit linked product(s), the fund(s) shall be treated as existing fund(s) for subsequent unit linked products for the purpose of para-15.4 of circular dated 04.10.2022.
4. All other provisions of the above referred circulars shall remain unchanged.
5. This circular comes into force with immediate effect.
Chief General Manager (Actuarial)
