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The Insurance Regulatory & Development Authority (IRDA) has allowed further liberalisation by giving non-life insurance companies flexibility to design their own products so that customers can have tailor-made policies.
In a circular issued last week, IRDA said that the insurers would now be permitted to offer new products with variations in deductibles from those prescribed under the erstwhile fire, engineering, industrial all-risk and motor own-damage tariffs, subject to written disclosures and acceptance by the insured prior to finalisation of the policy.
The biggest gainers from the move are small businesses. A major improvement is that the insurance regulator has removed the minimum sum insured limit of Rs1 billion (US$20.5 million) for the industrial all-risk (IAR) policy that till now, only large corporations were allowed to buy. An IAR policy - a package cover - is cheaper and provides comprehensive cover than the piecemeal stand-alone policies for fire and insurance.
This easing of restrictions follows de-tariffing in the industry. IRDA lifted price controls in January 2006. But discounts were capped at 51.2% until 1 January this year when insurers were allowed free rein to quote all prices.
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