1. Preliminary
Currently, the coverage for Dwellings against Fire and Allied perils for Material Damage is as per the Standard Fire and Special Perils (SFSP) policy provided for in the erstwhile All India Fire Tariff, 2001.
2. Objective
Through these Guidelines, a new standard product, namely, “Bharat Griha Raksha” is being introduced for covering Dwellings against Fire and Allied perils for Material Damage which shall replace SFSP for Dwellings (both Home Building and Home Contents).
3. General
3.1. These Guidelines for Bharat Griha Raksha are issued in exercise of the powers conferred upon the Authority under clause (i) of sub section (2) of Section 14 of IRDA Act, 1999 and in continuation of Notification F.No.IRDAI/Non-Life Insurance/5/171/2020 dated 28th December, 2020, issued in terms of Section 64 ULA (1) of Insurance Act, 1938.
3.2. These Guidelines shall come into effect on 1st April, 2021.
3.3. These Guidelines replace the General Regulations, terms, conditions, clauses, warranties, policy, add-ons, endorsement wordings and proposal form under Sections I, II and III of the erstwhile All India Fire Tariff (AIFT), 2001 along with relevant annexures applicable to Dwellings irrespective of the Sum Insured.
3.4. The standard product Bharat Griha Raksha shall be mandatorily offered by all general insurers carrying on the business of Fire and Allied Perils insurance, for all new risks as well as renewals with effect from 1st April, 2021. Insurers shall pre-fix their company name (shortened, if need be) to the standard product name.
3.5. (a) Bharat Griha Raksha policy shall fall under the ‘Retail’ category of products.
(b) The definition of ‘Retail products’ as provided for in the Product Filing Procedures for General Insurance Products ref IRDAI/NL/GDL/F&U/030/ 02/2016 dated 18th February, 2016 (Product Filing Guidelines) shall stand modified to include Bharat Griha Raksha, irrespective of the Sum Insured.
3.6. Apart from being applicable for Bharat Griha Raksha as an independent standard product, these Guidelines shall also apply when Bharat Griha Raksha, is incorporated as part of a Package Policy or other policies.
3.7. Bharat Griha Raksha Standard Proposal Form, Standard Prospectus, Standard Policy Wordings (including optional covers offered in addition to the basic policy and in-built covers), Standard Key Features Document (KFD), Special Clause (Agreed Bank Clause) as provided for herein shall be adopted by all insurers.
3.8. No insurer shall change or alter any part of the wordings of these documents. However, where the proposer has not opted for any Optional Cover (optional covers being part of the Standard Policy Wordings), the same can be deleted from the Standard Policy Wordings.
4. Applicability
Bharat Griha Raksha is meant for covering Home Building and/or Home Contents in India.
5. Documentation
Bharat Griha Raksha has the following documents attached (Annexure 1)
(a) Standard Proposal Form
(b) Standard Prospectus
(c) Standard Policy wordings (including optional covers along with the basic cover)
(d) Standard Key Features Document (KFD)
(e) Standard Special Clause (Agreed Bank Clause)
6. Standard Proposal Form
While the Standard Proposal Form has been prescribed by these Guidelines, insurers shall include questions relevant to innovative add-ons, as the case maybe. However, no other questions shall be added nor can the proposal form be modified in any other manner.
7. Policy Schedule
7.1. Insurers shall design a Standard Policy Schedule which shall, at the minimum, contain the following information. Insurers shall also ensure compliance with the relevant provisions of the IRDAI (Protection of Policyholders’ Regulations), 2017.
i. Details of Proposer
ii. Risk details
iii. Details of Policy Period
iv. Details of basic cover/s opted for (Home Building or Home Contents or both)
v. Details of in-built covers
vi. Details of optional cover/s opted for, if applicable.
vii. Details of innovative add-ons, as applicable
viii. Details of Sums Insured as applicable
ix. Details of premium paid
7.2. The Standard Policy Schedule shall be filed with the Authority for prior approval, along with other required documents following the procedure required under the extant Product Filing Guidelines.
8. Policy Duration
Bharat Griha Raksha policy duration shall not be more than 10 years.
9. In-built covers
In addition to the basic cover for Home Building (including additional structures as the case may be) and/or Home Contents (including automatic cover for Home Contents), Bharat Griha Raksha offers in-built covers for Loss of Rent and Rent for Alternative Accommodation, apart from providing cover for Removal of Debris and payment of Architect’s, Surveyor’s and Consulting Engineer’s fees.
10. Optional covers
In addition to the basic cover and in-built covers, Bharat Griha Raksha offers two optional covers, namely, (1). Cover for Valuable Contents on Agreed Value Basis (under Home Contents cover) and (2). Personal Accident cover for insured and spouse where insured peril causes damages to Home Building and/or Home Contents and also results in the death of either or both of them.
11. Terrorism cover
11.1. Cover against terrorism is part of the basic product. Insurers shall attach the relevant clause reflecting the standard wordings agreed upon in the Indian Market Terrorism Risk Pool (IMTRIP) and build the agreed rate into the pricing of the product.
11.2. The same shall be reflected in the Technical Note when the product is filed with the Authority under the File and Use procedure of the Product Filing Guidelines.
12. Basis of Sum Insured
12.1 Home Building and Home Contents shall be insured on Reinstatement/Replacement value basis, as applicable. Insurance on market value basis either for building or contents is not permitted. Each insurer shall necessarily capture the carpet area of the Home Building and define the cost of construction per unit carpet area at the policy commencement date to arrive at the Sum Insured of the Building. The Sum Insured for Reinstatement/Replacement value, as applicable, can be higher than the defined cost of construction at the policy commencement multiplied by carpet area but NOT lower.
12.2 Optional cover for Valuable Contents on Agreed Value Basis shall be available on declaration of the details and submission of a Valuation Certificate. The requirement of submission of Valuation Certificate shall be waived if the sum insured opted for is up to Rs. 5 lakh and individual item value does not exceed Rs. 1 lakh.
12.3 Optional cover for Personal Accident (Death only) due to an insured peril for the Insured and spouse shall be available for a compensation amount of Rs. 5 Lakh per person.
12.4 For long-term policy, the Sum Insured for Building of Bharat Griha Raksha shall auto escalate @10% per annum. The auto escalation shall always be applicable on the base Sum Insured on a straight line method for a maximum of 100% of the Sum Insured at the Policy Commencement Date without additional premium. E.g. a Sum Insured of Rs. 10 Lakh at policy inception shall escalate to Rs. 11 Lakh by 1st policy anniversary, Rs. 12 Lakh by 2nd policy anniversary, Rs. 13 Lakh by 3rd policy anniversary and so on, with the maximum being Rs. 20 Lakh without additional premium.
12.5 For Annual Policy, the Sum Insured shall be automatically increased each day by an amount representing 1/365th of 10% of Sum Insured at the Policy Commencement Date.
12.6 The Sum Insured for General Home Contents shall be automatically taken as 20% of the Sum Insured of the Home Building subject to a maximum of Rs. 10 Lakh if the Home Building is covered, unless the Home Contents cover is opted out by the proposer as a recorded choice. For General Home Contents, the proposer can opt for a higher Sum Insured by specifically declaring the same along with details.
13. Premium
13.1 The premium collected under Bharat Griha Raksha shall be accounted under the Fire line of business.
13.2 Insurers shall lay down the Minimum Premium for Bharat Griha Raksha and state it clearly in the Prospectus.
13.3 Where short-period scales of rates are laid down, it shall be stated clearly in the Prospectus. Similarly, the scales of refund payable to the insured when the insured requests for cancellation of the policy shall be mentioned in the policy wordings against the relevant clause provided for. The scales shall be part of the filing under the extant Product Filing Guidelines.
14. Add-ons
14.1 All add-ons currently being used by insurers for the Standard Fire and Special Perils (SFSP) Policy for Dwellings shall be deemed withdrawn with effect from 1st April, 2021.
14.2 Insurers are permitted to file innovative add-ons to Bharat Griha Raksha.
14.3 However, these add-ons shall be filed in tranches. Not more than 5 add-ons shall be permitted to be filed on or before 31st March, 2021. Subsequently, within the first 6 months of launch of the product, i.e., by 30th September, 2021 the second tranche, which shall again not exceed 5 in number, may be filed. The rest may be filed subsequent to that.
14.4 Premium for the add-ons should not exceed 50% of the base premium for Bharat Griha Raksha.
15. Filing procedure
15.1 The basic product, along with the optional covers, shall be subject to the File and Use procedure as stipulated in the Product Filing Guidelines.
15.2 All general insurers shall carry out the filing (which includes the pricing approach) for the basic product on or before 28th Feb, 2021.
15.3 Innovative add-ons, if any, shall be filed subject to Clause 14.3 above.
16. Underwriting Policy
Insurers shall carry out the required modifications in their Underwriting Policy bearing in mind the introduction of Bharat Griha Raksha.
17. Training for distribution of Bharat Griha Raksha
Insurers shall ensure that the agents, intermediaries and other permitted distribution channels have the necessary information and skills to explain and market the product. The required training needs to be imparted to them. For all online/digital sales, the extant regulatory framework that is applicable shall be scrupulously followed.
18. Technical Audit
The Technical Audit Department of the insurer shall ensure oversight over the underwriting of these products to ensure compliance with these Guidelines, apart from compliance with the extant Product Filing Guidelines.
19. Extant Product Filing Guidelines
Other than what has been provided for under these Guidelines, all extant provisions as per guidelines ref. IRDAI/NL/GDL/F&U/030/02/2016 dated 18th February, 2016 shall be applicable for Bharat Griha Raksha.
20. Miscellaneous
Insurers violating any of the provisions of these Guidelines shall be subject to regulatory action in accordance with the provisions of the applicable laws/other framework.
