The insurance companies are mandated to take prior approval from the Insurance Regulatory and Development Authority (IRDA) of the product before launching.
As per File and Use Guidelines, the insurance companies are required to launch products after allowing for 60 days for non-life and 30 days for life for clearance by the IRDA. Several times, however, the full details of the product, which are required in order to assess the product, are not furnished and consequently there is delay.
The time lag for this process depends on the complexity of the product, the price, features, benefits and terms and conditions of the product.
The shortest and longest time taken for product approval (from date of receipt to date of clearance) is in the ranges of 2 days to 1708 days, with an average time-lag of 109 days for the life insurance products, 103 days for the general insurance products excluding health insurance products and 176 days for health insurance products, as informed by IRDA.
Being a service industry, the popularity of insurance industry depends on the quality of service rendered by the company in terms of innovative products and speedy settlement of claims. The quality of service may be hampered if the products are not properly worded, under/excess priced and doesn’t meet the needs of the customer. IRDA has informed that need-based and reasonably priced insurance products by the insurance companies would increase the popularity of the industry.