Page 46 - Insurance Times April 2017 Special Issue on Newindia

or to longer /shorter premium payment terms 2016 and IRDAI Circular under Ref: IRDA/ACT/
and policy terms under approved products/riders CIR/MISC/054/03/2017 dated 7th, March 2017 on
"File and Use procedure for minor modifications
1.8. Change in minimum / maximum premium and/or
under existing products and riders offered by Life
benefits amounts
Insurers".
The insurers may simultaneously make one or more
modifications mentioned above to the products and 3. Specific norms to be satisfied under each modification:
riders already approved subject to the condition that In addition to above generic norms, the following
benefit structure has not changed compared with last norms specific to each modification shall also be
modified / originally approved version. complied with. The norms in respect of each
The existing File and Use procedure is applicable for all modification are stated below:
other modifications not covered above and for new 3.1. Changes in premium rates/charges and benefit
products / riders. amounts under approved products and riders on
account of implementation of IRDAI (Payment of
2. General Norms to be satisfied: commission or remuneration or reward to
The modifications mentioned in para 1 above can be Insurance Agents and Intermediaries)
made only if the norms mentioned below in respect of Regulations, 2016 will be allowed provided the
each modification are satisfied following norms are satisfied:
2.1. There is no detrimental change in premium rates/ 3.1.1. The change in premium rates/charges and
charges, benefit structure or any other provision benefit amounts after modification are
in respect of policies already sold under existing limited to +/- 5% of the premium rates and
versions of the product / rider. benefit amount of the already approved
product and rider.
2.2. There is no change in benefit structure of the
product / rider. 3.1.2. There is no change in any other parameter
in the premium basis except commission or
2.3. The premium rates/charges, benefit structure,
reward or sales related expenses.
terms and conditions under modified product and
rider are, workable and sound, the assumptions 3.2. Changes in premium rates and/or benefit amounts
are reasonable and premium rates fair. under Non-Linked Non Par products (including
annuities) on account of change in interest rates
2.4. The premium rates/charges under modified
under premium basis provided the following
product and rider are equitable between
norms are satisfied:
policyholders of different distribution channels.
3.2.1. The change in premium rates and benefit
2.5. Other conditions stipulated at the time of amounts after modification are limited to
approval of original product (e.g. requirement +/- 15% of the premium rates and benefit
that in respect of Par products, the projected
amounts under originally approved
maturity benefit is at least equal to premiums paid product.
on the basis of projected investment return of 4%
3.2.2. There is no change in any other parameter
p.a. throughout the policy term etc.) are compiled
in the premium basis except investment
in respect of modified product also.
return, inflation of expenses and risk
2.6. The modified products and riders comply with all discount rate.
the extant norms and Regulations of the
3.2.3. There shall be a gap of at least one month
Authority. This includes but not limited to IRDA
after the last modification under this
(Non Linked Insurance Product) Regulations 2013,
product/rider on account of change in
IRDA (Linked Insurance Product) Regulations
interest rate in the premium basis.
2013, clarifications issued thereon, IRDA
(Protection of Policyholders' Interests) Regulations This para 3.2. mentioned above supersedes para
2002, IRDAI (Expenses of Management of Insurers 5 of Circular Ref: IRDA/ACTL/REG/CIR/158/07/2014-
transacting life insurance business) Regulations, 15 dated 7th July, 2014.

46 The Insurance Times, April 2017

Copyright@ The Insurance Times. 09883398055 / 09883380339