The Insurance Regulatory and Development Authority of India (Irdai) in Jun 2022 extended the "Use and File" procedure to all health insurance products and the majority of general insurance products under, fire, motor, marine, and engineering in an effort to give insurance companies more flexibility to respond to the emerging market needs in terms of products. Earlier prior to launching new products, insurance companies had to receive prior clearance from the insurance regulator.
With the Use and File guidelines, insurers have been able to bring innovative insurance products to life at a much faster rate than it was possible earlier. Insurance companies have thereby welcomed the change since it allows them more flexibility and makes it easier for them to introduce products, but they also think that client protection will need to take even higher precedence.
New products such as Pay as You Use in motor insurance and customizable health insurance with wellness covers have been launched since the “Use and File” guidelines have been released for General insurance business. With Use and File insurers are able experiment and get an understanding of customer response at a much faster rate. This will in near future result in more choices for customers in selecting coverage or policy type as per their needs. For insurers this would mean more competition from upcoming and innovative companies.
Note under Use and File, insurer needs get approval from Product Management Committee comprising of key members of the company prior to launching the product in market. Further post launch insurer needs to file the product along with all its documents with IRDAI within 7 days.
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