IRDA EXTENDS PRODUCT FILING DEADLINE TO END OF JANUARY

India’s Insurance & Regulatory Development Authority (IRDA) has extended to January 31 the deadline for filing new products under the now mainly detariffed non-life market. On Monday December 25 IRDA issued a circular stating that it had observed that some insurers were “offering their client/brokers discounts exceeding 20% of the present tariff rate with the condition that, if such discounts are not approved by IRDA, the insured shall pay back the discount allowed in excess of 20%”. IRDA said that any insurer dropping its rates by more than 20% (10% in the case of motor) whether for new policies or for renewals, would be “guilty of violating IRDA’s instructions”. IRDA also reiterated that “there is no question of any discount in lieu of agency commission or in lieu of broker remuneration in respect of fresh business or renewal effect 1st January 2007”. IRDA chairman CS Rao said that some agents/brokers had been rebating commissions, which was not allowed, and that some insurers had been offering excessive discounts. IRDA further stated that insurers will only be allowed to alter pricing once every six months, despite “detariffing”. Mr Rao said that “the new rates, when cleared, will have a six-month lock-in period stipulation”. Changes subsequent to this will require back-up figures such as a low claims ratio.