A working group has been constituted by IRDAI to revisit the product structure of title insurance, develop a standard product and recommend measures to spur demand for the product. The decision comes in the backdrop of a less-than-desired response to title insurance products. “The number of title insurance policies sold is minimal despite availability for the last one and half years and the obligation cast under the Real Estate (Regulation and Development) Act, 2016 upon promoter/developers to obtain the said policy,” said the IRDAI order, while constituting a 12-member working group.
There are very few general insurers that offer title insurances and their product features vary in policy terms and conditions and scope of coverage depending on the support received from their reinsurers. While stating this, IRDAI said the feedback received from the Government of India revealed that stakeholders, especially developers associations, had flagged the need for standardisation in title insurance products.
The working group has been formed with a deadline of three months to submit the report. Apart from developing a standard product and coming out with recommendations to spur demand, the group will examine the legal and regulatory framework in place and its impact on the marketability of title insurance; study the structure of such products available and analyse reasons for sluggish demand; and suggest augmentation of reinsurance capacity in the domestic market.
