This master circular replaces circulars issued earlier about the submission of regulatory returns.
On Friday, the Insurance Regulatory and Development Authority of India (Irdai) issued a master circular on the submission of returns for the insurers, which could lead to quicker claims and lower premiums for the policyholders. The master circular provides a one-stop reference for insurers, including Foreign Reinsurance Branches (FRBs) on 202 regulatory returns to be filed with Irdai.
Sundaram Varadhan, Secretary, the Insurance Brokers Association of India (IBAI), said that with the current move, policyholders could expect improved customer service, quicker and fairer claims settlement, and potentially lower premiums due to reduced compliance costs and time. “This proactive approach by Irdai is a positive step towards fostering a more transparent and efficient insurance market, ultimately enhancing the overall customer experience and upholding policyholders' interests," adds Varadhan.
According to experts, overall, the circular emphasized operational efficiency, as simplified regulations enhance operational processes for reinsurers, insurers, and brokers. Also, it mentioned speedy and fair claim settlement, as strict timelines ensure faster and fairer claims resolution. It mentioned reduced compliance time- the industry currently uses almost 25-30 per cent of its time in compliance, which will be significantly reduced. It stressed lower compliance costs as simplified processes will lead to reduced compliance costs, potentially lowering premiums for policyholders. The circular mentioned innovative insurance products, which encourages the development of more tailored and innovative insurance solutions with adequate reinsurance support. It also said that policyholders would benefit from faster service delivery and better customer support.
“This master circular replaces circulars issued earlier about the submission of regulatory returns. It provides guidance/instructions on filing returns, wherever necessary, for ease of understanding. It shall apply to every life insurer, general insurer, health insurer and reinsurers and FRBs transacting reinsurance business in India,” according to the circular.
As part of this exercise, moving towards principle-based regulations, 37 regulations consolidated into seven regulations, and an additional two new regulations were notified, effective from 1 April 2024. Operational guidelines under these regulations are issued as master circulars.
Various regulatory returns numbering 60 required to be filed under these regulations/operational guidelines are now collated in one place and are issued as a master circular on Submission of Returns. The master circular also has a collection of 142 returns, required to be filed with Irdai in different periodicities (quarterly/half-yearly/annual).
Darvesh Panchal, vice president, Prudent Insurance Brokers, said that the Irdai’s comprehensive overhaul of the insurance regulatory framework, effective April 1, 2024, simplified compliance for insurers and enhanced the ease of doing business. “By consolidating 37 regulations into seven and issuing two new ones, along with master circulars for operational guidelines, the regulatory landscape becomes more navigable. For policyholders, this streamlining means potentially faster service and improved efficiency from insurers, as they can now focus more on customer service rather than navigating complex regulatory requirements. The consolidation of 202 regulatory returns into a single reference point further reduces administrative burdens, fostering a more responsive and agile insurance sector,” adds Panchal.
“These regulations and the corresponding master circulars require insurers and reinsurers, including foreign reinsurance branches, to submit certain returns on a periodical basis, wherein reference is made to the master circular on submission of returns. In this context, this master circular is being issued aiming to create a single reference for all such returns and harmonize the timelines for filing. It also aims to consolidate relevant instructions for filing of these returns, where applicable, into a unified framework,” according to the master circular.
The master circular is divided into three parts. Part – I of the circular stipulates returns specified in the eight regulations given above and corresponding master circulars. These returns will check the fulfilment of the objectives of the regulations and monitoring of the performance/ working of the insurers. Part – II of the circular is business statistics that are collected either through a business analytics project (BAP)/email. This is to understand the growth and spread of the business in various geographies, distribution channels, demography, product segments, persistency, renewability, etc. It provides greater insights into the company’s business strategy. Part – III of the circular repeals the various circulars which are no longer applicable, after the notification of this circular.