Insurance Companies Mandated to Take Prior Approval of IRDA of their Products Before Launching
The insurance companies are mandated to take prior approval from the Insurance Regulatory and Development Authority (IRDA) of the product before launching.
As per File and Use Guidelines, the insurance companies are required to launch products after allowing for 60 days for non-life and 30 days for life for clearance by the IRDA. Several times, however, the full details of the product, which are required in order to assess the product, are not furnished and consequently there is delay.
The time lag for this process depends on the complexity of the product, the price, features, benefits and terms and conditions of the product.
The shortest and longest time taken for product approval (from date of receipt to date of clearance) is in the ranges of 2 days to 1708 days, with an average time-lag of 109 days for the life insurance products, 103 days for the general insurance products excluding health insurance products and 176 days for health insurance products, as informed by IRDA.
Being a service industry, the popularity of insurance industry depends on the quality of service rendered by the company in terms of innovative products and speedy settlement of claims. The quality of service may be hampered if the products are not properly worded, under/excess priced and doesn’t meet the needs of the customer. IRDA has informed that need-based and reasonably priced insurance products by the insurance companies would increase the popularity of the industry.
This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Rajya Sabha today.
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Growth of 11% in Policies and 22% Per Cent in Premium of Conventional Plans of Life Insurance
As far as the, Conventional plans of Life Insurance policies are concerned, there is a growth of 11% in policies and 22% in premium as on 29.02.2012, whereas, there is a degrowth on the Unit Linked Insurance Plan (ULIP) which is a trend among the whole insurance industry.
This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Rajya Sabha today.
The Minister of State Shri Meena further informed that number of Agents is related to the business potential in the insurance market. Commission to agents are paid as per Section 40(A) (1) of the Insurance Act, 1938. Further, the commission rates for any new products are also approved by Insurance Regulatory and Development Authority. The Life Insurance Corporation of India (LIC) has reported that there is no instance of quitting of agents in lakhs in LIC due to reduced commission or strict guidelines to agents set for them by LIC.
The total number of LIC agents during the year 2010-2011 was 13,37,064 and as on 31.01.2012 it was 13,05,430.
As policy seekers benefactor,all policy-life /non life,especially health insurance-new or already being sold, requires strict regulator’s scrutiny .1.simple sentences 2. what is payable /what is not payable. 3.time frame for reimbursement 4. no additional information requirement letters when claim is submitted with required documents 5.quality of qualified claim processors.6.reporting of number of claim submitted, paid, no claimed, pending court cases claim & excess money spent by insurers in court cases -this be made mandatory on all proposal forms & policy schedules