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Friday, December 7, 2012

IRDA to come out with norms for new products soon

The Insurance Regulatory and Development Authority is working with the insurance industry to bring out a new product design template that will see the emergence of new products in the market.

The insurance watchdog is in the advanced stages of preparing the draft guidelines for new products, both in the life and non-life segments.

“We will come out with the new guidelines by the month-end,” IRDA Chairman J. Harinarayan, told media persons on the sidelines of an event here today.

The new guidelines will specify things such as quantum of guaranteed death benefit and, if these are in the pension segment, the quantum of annuity.

“The new products should cater to different segments of people and the insurers have to take into account the new expectations of the customers,” he said.

Insurance markets

He cited the example of the insurance markets in Europe and America, where the products changed contours over the years, with pension products on the rise and endowment products on the decline.

“Insurance products in Europe in the 1980s are no longer in the market now. We should also head in this direction with more savings oriented products with smaller tenure,” he pointed out.

New regulatory framework

The insurance regulator is also in the process of finalising new guidelines and regulations for micro-insurance, health insurance and bancassurance segments.

“While the new regulatory framework for the health insurance sector will be ready by this month-end, the new bancassurance guidelines will be brought out in the later part of January 2013,” Hari Narayana said.

In response to a question, he said the Indian non-life insurance sector was growing at a healthy clip of about 20 per cent.

The life insurance sector, which has seen a decline in growth in the last few years, could land in positive territory this fiscal, with a marginal growth, he said.


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