Explained: How ‘Use and File’ system will bring new health insurance products faster | Explained News,The Indian Express
IRDAI has decided to extend the 'Use and File' procedure to all health insurance products. What is 'Use and File', and how will it help?
The Insurance Regulatory and Development Authority of India (IRDAI) has decided to extend the ‘Use and File’ procedure to all health insurance products. The move is expected to facilitate faster customer access to health policies.
Under ‘Use and File’, insurers are permitted to market products without the regulator’s prior approval, thus avoiding a long wait. Under the existing ‘File and Use’ system, an insurer wishing to introduce a new product has to first file an application with the IRDAI and use the product for sale in the market only after getting all regulatory approvals. “The Product Management Committee of the insurer should ensure compliance to the policy of the board while signing of the new products or modification of products,” IRDAI said.
“This reform authorises insurers to launch products innovative and customised to buyers, avoiding a long waiting duration,” said Sylvester Carvalho, Lead- Product, Riskcovry.
General and health insurance companies launch, modify or revise all categories of products and add-ons or riders in the health insurance business through the ‘Use and File’ method. This means insurance firms can quickly introduce new schemes with innovative features, enabling people to participate and cover their health expenses. Earlier, companies used to file scheme drafts with the regulator and wait for weeks and months to get clearance.
The new initiative has come at a time when demand for health coverage products has risen significantly in the wake of the pandemic. “The proactive initiative by IRDAI will provide some necessary mechanisms to insurance companies which wish to bring out more innovative products in the market at a faster frequency,” said Tapan Singhel, MD and CEO, Bajaj Allianz General Insurance. Customers have the opportunity to choose from a range of insurance products that best suit their needs and thus secure themselves against any exigencies, Singhel said.
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