The Insurance Regulatory and Development Authority of India (IRDAI) have decided to digitize its entire product approval process, for both life and general insurance products by the end of this year as quoted in The Economic Times.
According to a private life insurance company’s senior official, IRDAI is rolling out the online system for tracking the product development and approval process so that approvals can be quicker and more such products can be put online for sale in a shorter time frame.
In a circular, the IRDAI has stated that they are inclined to facilitate the promotion of e-commerce in insurance space, which will lower the cost of transacting insurance business and bring efficiency and greater reach. Insurance company officials had also attended an IRDAI training programme two months ago regarding the same.
"Offline products take at least four to six months to be approved. The same process may not be practicable for an online insurance market where customers look for new products and riders on a regular basis. Hence, the portfolio requires to be updated every few month," says the Product Head of a mid-size life insurance company.
At present, some insurers are following a parallel process in which they file their products online as well as through the original physical route. "The idea is to being in more transparency and expedite the product approvals," said another top official with a private insurer.
Moreover, this initiative is beneficial for the customers, as the proposal form would get much simpler with fewer questions, reducing the turnaround time to buy insurance.
This new proposal will help IRDAI to track on a real-time basis whether the products are complex and companies are taking too long to respond to queries. "They can ascertain whether companies have taken earlier feedback into account or the same queries are surfacing time and again," he added.