1. The process of bringing the Fire and Allied Perils Insurance business out of the ambit of the All India Fire Tariff, 2001 which began in 2006-07 and 2007-08 with de tariffing of the pricing aspect, will stand completed with effect from 1st April, 2021 for certain businesses, namely dwellings and micro level and small level enterprises as detailed in Notification F.No. IRDAI/Non-Life Insurance/5/171/2020 dated 28th December, 2020 attached.
2. With effect from 1st April, 2021, Fire and Allied Perils Insurance for these businesses shall be governed by the Authority’s Guidelines bearing Ref. IRDA/ NL/GDL/MISC/004/01/2021 and Ref. IRDA/NL/GDL/MISC/005/01/2021 respectively, both dated 4th January, 2021, as attached.
3. The Guidelines prescribe standard products under the Retail category for the three identified segments.
4. Insurers shall carry out the necessary preparatory work to transition to the new products replacing the current Standard Fire and Special Perils (SFSP) policy for the identified categories. Needless to mention, the SFSP policies issued upto 31st March, 2021 shall continue till the expiry of the respective policy periods at which point they shall be replaced with the new products as applicable.
5. Transition to the new products would entail the following steps to be taken by insurers:
i. Follow the product filing procedure set out in the Product Filing Guidelines as well as the respective specific guidelines for the various products that will come into effect from 1st April, 2021. The filing shall be carried out through the Business Analytics Project (BAP).
ii., Ensure that all agents, intermediaries and other applicable distribution channels are made fully aware of the three products and appropriate training is given to them, apart from making available the required literature.
iii. Create awareness amongst policyholders and the general public about the products. Apart from communicating one to one as may be necessary with the policyholders, insurers should display the products on their website with a Frequently Asked Questions section. We suggest that insurers have a separate team to address queries and doubts of policyholders and the general public.
iv. Insurers should undertake the necessary changes in their IT systems to launch the products with effect from 1st April, 2021.
v. Various other aspects such as changes required from the perspective of Reinsurance, Accounting etc are to be addressed as well.
6. The Authority will be organizing a webinar on the subject for all insurers shortly, the details of which will be intimated separately.
7. Questions, if any, may be addressed to nl-products@irdai.gov.in
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