To give wider choices to customers and increase insurance penetration, regulator The Insurance Regulatory and Development Authority of India (IRDAI) on Thursday permitted general insurers to design alternative products to cover risk from fire and allied perils for dwellings and small businesses, PTI reported.
IRDAI had issued guidelines for standard products for fire and allied perils for dwellings, micro and small businesses (Bharat Griha Raksha, Bharat Sookshma Udyam Suraksha and Bharat Laghu Udyam Suraksha) in January 2021.
"After considering the increasing demand for new covers in the fire line of business, the Authority...hereby permits general insurers to design and file alternative products covering fire and allied perils for the risks (de-notified earlier," IRDAI said.
Such alternative products, it added, may be variations of the standard product and may include already approved add-ons as part of the base product or may delete an existing provision.
"However, the definitions and wordings of terms used in the standard product shall be the reference point for those terms when used in the alternative products as well. Needless to add, the pricing of the products shall be commensurate to the risks involved," IRDAI said.
The latest directives will come in force from June 1, 2022.