Insurers get nod from Irdai for products covering fire and other perils

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Insurance regulator Irdai on Thursday authorized general insurance companies to design new customized products for homes, micro and small businesses against fire and related risks as part of its continued efforts to increase the penetration of insurance and offer a wider choice to policyholders.

“This decision will allow insurance companies to expand the coverage already provided in standard products by offering innovative add-ons or modifying existing provisions to meet the needs of policyholders in terms of suitability and affordability. This comes after the introduction of standard products in this segment, namely Bharat Griha Raksha, Bharat Sookshma Udyam Suraksha and Bharat Laghu Udyam Suraksha in April 2021,” the Insurance Regulatory and Development Authority (Irdai) said in a statement. press release, adding a circular dated May 12. , 2022, has been published in this regard.

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“Having considered the growing demand for new cover in the fire sector, the Authority hereby authorizes general insurers to design and deposit alternative products covering fire and related risks… These alternative products may be variants of the standard product and may include previously approved additions. -ons as part of the base product or can remove an existing layout. However, the definitions and formulations of terms used in the standard product should be the point of reference for those terms when also used in the alternative products. Needless to add that the pricing of products must be proportionate to the risks involved,” the insurance regulator said.

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Irdai also clarified that it does not impose any minimum rates for the setting of premiums by insurance and reinsurance companies. “It has come to the attention of Irdai that policyholders are led to believe that the burn cost published by the Insurance Information Bureau of India (IIB) is a ‘compulsory minimum rate’. The industry burning cost is only a benchmark for understanding industry fire risk claims experience and should not be construed as a mandatory minimum rate set by Irdai “, did he declare.

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“Insurance companies have also been advised to ensure there is no misinformation for policyholders and other stakeholders about this,” he added.

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