INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

FILE AND USE PROCEDURE

GENERAL INSURANCE PRODUCTS

CIRCULAR NO. IRDA/GEN/FUP/VER 1.0/ DEC 2000/

THIS CIRCULAR IS APPLICABLE TO ALL INSURERS REGISTERED TO DO GENERAL INSURANCE BUSINESS IN INDIA, EFFECTIVE FROM DATE OF ISSUE.

1. Application.—This circular is applicable to all insurers carrying on general insurance business in India, registered in accordance with section 3 of the Insurance Act, 1938, in respect of all these products including the products controlled and regulated by the Tariff Advisory Committee under Section 64U of the Insurance Act., 1938. The products referred to herein are products under general insurance business and include Fire, Marine Cargo, Marine Hull, and Miscellaneous insurance business, and Health insurance business, as the case may be.

2. Description of File and Use Procedure. — (1) Every insurer, at the time of introducing a new product, shall file an application for such product with the Authority and use the product for sale in the market, subject to the requirements set out in para 4.

  1. Every insurer, who intends to make changes to any existing product or to withdraw an existing product, shall conform to the requirements set out in para 6 for changes and in para 7 for withdrawals.
  2. A separate application shall be made in respect of each product and procedure.

3. Procedure to be followed for rating of new insurance products by Tariff Advisory Committee. —(1) The Tariff Advisory Committee at the time of determining any rate schedule in respect of any policy shall file product and pricing details with the IRDA like any other insurance company as prescribed in Para 4. The Tariff rates should be certified by an Actuary appointed by the TAC together with policywording including exclusions atleast 30 days before implementation of these rates.

(2)In respect of existing products TAC shall submit certified copy of the standard forms, and statement of rates, advantages terms and conditions being offered in connection with insurance policies and shall conform to the requirements set out in para 4.

(3) If TAC intends to make changes to any existing product or to withdraw or modify an existing product or procedure, it shall conform to the requirements set out in para 6 for changes and in para 7 for withdrawals

4. Procedure to be followed for introduction of new insurance products. — (1) Every insurer authorised to carry on general insurance business, at the time of introducing a new product, shall submit an application to the Authority along with the prescribed form:

(i) Form IRDA – General Insurance - Non Tariff, in case of products not controlled and regulated by the TAC.

(ii) Form IRDA – General Insurance - Tariff, in case of products (including package products) controlled and regulated by the TAC. A copy of such form along with all attachments shall also be simultaneously submitted to the Tariff Advisory Committee, Head Office

(2) The Authority/ TAC will issue an acknowledgement of date of receipt of application.

(3) Within 10 days of the receipt of the application referred to in sub-para (1)(ii), the TAC may advise the Authority about objections, if any, or whether additional information needs to be sought with regard to the product, and confirm the same in writing by writing to the insurer with a copy endorsed to the Authority.

(4) Within 30 days of the receipt of the application referred to in sub-para (1), the Authority may seek additional information with regard to the product, and the insurer shall not commence selling the product in respect of which additional information has been sought by the Authority, until the Authority confirms in writing having noted such information. If no such information is sought by the Authority, the insurer can commence selling the product in the market, as set out in the application after the expiry of the said 30-day period from the date of filing of the product with the Authority.

5. Procedure to be followed for filing existing products of existing insurers. –Every insurer carrying on general insurance business before the commencement of the Insurance Regulatory And Development Authority Act, 1999 shall submit certified copy of the standard forms, and statement of rates, advantages terms ad conditions being offered in connection with insurance policies before 31st January, 2001 and shall conform to the requirements set out in para 3 above.

6. Procedure to be followed for changes in terms and conditions of existing products. – Every insurer authorised to carry on general insurance business, at the time of introducing changes to an existing product, shall submit an application to the Authority setting out the details of the changes in the terms and conditions and give reasons for carrying out the proposed changes, subject to procedure laid down in para 3.

7. Procedure to be followed in case of withdrawal of existing products. – Every insurer authorised to carry on general insurance business, before withdrawing an existing product, shall inform the Authority giving the details of the product and the reasons for withdrawal.

8. The procedure to be followed in case of compulsory insurances and rates arrived on the basis of market agreement s, if any, will be announced separately.

 

 

 

Form IRDA– General Insurance - Non Tariff /Tariff

(Application for ‘File and Use’ of general insurance products)

.

1. Name of Insurer:

2. Name of Appointed/ Consulting Actuary:

3. Brand Name of the insurance product and Product Identity Number:

4. Date of introduction of the product (proposed in case of new products; actual date in case of existing products)

5. Date of change (proposed in case of existing products, but not applicable for new products)

Terms and Conditions

6. Specify clearly the following, in respect of the insurance product

1. Availability of Coverage

- Specify geographic location: -------------------------- / All geographic regions of India

  1. State:

- Minimum premium: Rs. [ ] in 000’s

7. General Description of the Product.

This section should describe the various contingencies under which the benefits would be payable and how these benefits would be calculated.

8. Product Features. (Enclose blank copies of policy forms, applications, riders, endorsements along with copy of proposal form each bearing distinctive identity form number)

This section should describe the following:

9. Target Market.

This section should discuss the target market for which the product is designed. If the product is to be marketed for a limited period, this should be indicated. (Generally, no such time limitations may be intended.) If the product is be targeted to any specific geographic regions, this should be indicated. If any special attempt is made to serve the areas covered by Section 32B and 32C of the Insurance Act, 1938. Kindly state the same here in detail.

10. Distribution Channels

This section should describe the channels to be used for distributing the product. If multiple channels are to be used, the expected proportions should be indicated.

11. Treatment of Different Classes for the purpose of underwriting.

12. General Policy Provisions

This section should give information on the following:

13. Reinsurance

This section should describe the reinsurance arrangements. The retention limit should be indicated along with the name of the reinsurer and the terms of reinsurance (premium rates, commissions, etc.).

Financial Projections:

14. Pricing Assumptions

The pricing assumptions will depend on the nature of product. Give details of the following (Also, give the actuarial formulae, if any, used; if not, state how premiums are arrived at with a brief description of how rates have been determined including general description and source of each assumption used):

15. Results of Financial Projections

The financial projection should show the following, for each model point:

16. Proposal Form and Sales Literature : (Application form required to be filled by the proponent to purchase the insurance product).

Enclose a specimen copy of the proposal form along with the prospectus and sales literature made available providing information to the prospects.

17.Iinsurance contract

Enclose a specimen copy of the policy bond to be issued to the purchaser of the insurance product.

18. Premium Table (including Rider Tables)

Enclose a copy of the premium table to be used by the distribution channels.

19. Certification.

The Insurer shall enclose a certificate from the Appointed Actuary, as per specimen given below:

" I, (name of the appointed actuary), the appointed actuary of the insurer carrying on general insurance business (name), hereby solemnly declare that the information furnished in the Form IRDA – General Insurance - Non Tariff,/ Tariff dated (date), is true and certify that, in my opinion, the premium rates, advantages, terms and conditions of the product (name of the product), which is a new insurance product to be launched in the market, are workable and sound, the assumptions are reasonable and premium rates are fair."

Signature of the appointed actuary.

Place

Date:

 

Signature of the Chief Executive Officer/ Principal Officer.

Place

Date: