Jan. 6: Insurance regulator, IRDA on Thursday has asked insurance companies to refrain from charging policyholders differential premium without the prior approval of the watchdog.
In the papers submitted to IRDA before launching any product, insurers mention a range within which the premium rates would vary depending on unfavourable risk factors. The insurance regulator in its circular to the general insurance companies said, “It should be ensured that no premium quotation is given, which is outside the range filed with IRDA and a rate that the underwriter and appointed actuary did not approve.”
IRDA has also asked the insurers to market their products in accordance with the terms and conditions as approved by the watchdog.
However, IRDA has noticed that some insurers offer premium rates outside the range filed with IRDA or offer discounts in premiums and other benefits on the product without charging any premiums. “This is an unhealthy practice, which besides attracting regulatory penal action, will impact the financials of the insurer, ultimately affecting the interest of the policyholders and shareholders as well. Such practices must be stopped immediately,” the IRDA circular added.