Health Insurance: 3-in-1 insurance: Soon, you can get life, health insurance and market linked investment in one combo product

The Insurance Regulatory and Development Authority of India (Irdai) has allowed insurance companies to launch individual & group unit-linked life and health insurance products and combi products without seeking prior approval from the regulator. In a circular released on June 20, 2023, the regulator adds additional categories to the existing ‘use and file’ procedure for life insurance products to expand its scope.

Till now, the ‘use and file’ norms applied to individual Ulips offered with existing and approved funds. Group Ulips were not a part of it. Under the revised procedure, the insurers are now permitted to ‘use and file’ group unit-linked life and health insurance products.

Irdai has also introduced combi products — the insurance products where life insurance acts as the lead insurer. This move will allow customers to buy comprehensive insurance coverage under a single policy as insurers can offer bundled products now. The insurance companies offering combi products must comply with the extant norms prescribed by Irdai, the regulator said.

“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,” the regulator said.

“This is a continuation of a series of steps that the regulator has taken to strengthen the insurance penetration in the country. This modification will enable insurers to increase their go-to-market speed and in turn, help them stay in sync with the dynamic demands of today’s customers,” said Sumit Rai, MD & CEO of Edelweiss Tokio Life Insurance.

These recent changes will allow insurance companies and new insurtech players to come with innovative combo products which can meet the need of good number of people.The regulator has also decided to do away with the Segregated Fund Identification Number (SFIN) clearance process for Ulips, the circular mentioned. However, insurance companies still have to comply with all prudential norms as per Regulation 9 of IRDAI (Investment) Regulations, 2016, as amended from time to time, for each segregated fund and the assets under management (AUMs) of unit-linked insurance plans (Ulips), the circular said.IRDAI also allowed the addition of new unit-linked funds to existing unit-linked products. Once the new fund(s) is/are added to existing or new unit-linked product(s), the fund(s) shall be treated as an existing fund(s) for subsequent unit-linked products, the regulator mentioned.

This circular will come into force with immediate effect.

“The introduction of comprehensive modifications to the existing ‘use and file’ procedure for life insurance products exemplifies Irdai’s unwavering commitment to promoting insurance penetration and ensuring the well-being of policyholders. These changes will bring a host of benefits for policyholders, including increased product options, access to comprehensive combi products, streamlined processes, and a broader range of unit-linked funds. These enhancements will make life insurance more accessible and empower individuals to protect their future and achieve their financial goals,” said Kamlesh Rao, MD & CEO Aditya Birla Sun Life Insurance.

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