Policy fine-tuning still some time away

Non-life insurance companies will have to wait for a few more months before they can change the wordings, terms and conditions of insurance policies.

The April 1 deadline, giving flexibility to insurers in designing policies, now stands deferred, according to an Insurance Regulatory and Development Authority (Irda) circular issued today.

Irda had agreed to provide full pricing freedom to insurance companies from January 1 this year.

In the file-and-use guidelines issued to insurers on September 28, 2006, Irda had said, "Insurers may file their proposals for changes in cover, terms, wordings, etc, for such products from a date to be notified by the Authority, but to be given effect to after March 31, 2008. In respect of products currently governed by tariffs, deductibles, other than the deductibles set out in the tariffs, can be offered only after March 31, 2008."

Accordingly, the General Insurance Council (a self-regulatory body of insurers) had prepared uniform market wordings for the industry, which could be used once they were granted the freedom to change covers.

"The Authority has decided that pending examination of common market wordings proposed by the General Insurance Council, insurers shall continue to use the coverage, terms and conditions, wordings, warranties, clauses and endorsements of the erstwhile tariff classes of insurance covers until further orders."

According to an Irda official, "The regulator is undertaking due diligence and will offer the freedom at a later stage."

Around 40 per cent of corporate renewals take place on April 1 every year.