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India’s insurance regulator Insurance Regulatory and Development Authority (IRDA) last Thursday proposed a standardised scheme for providing life and non-life insurance cover to economically weaker sections in rural and urban areas.
Under the proposed scheme, on which IRDA has invited comments from stakeholders, persons of low income will be provided insurance cover ranging from Rs 100,000-1 million (US$2,163 to US$21,631) at a comparatively low premium.
The insurance companies have to submit their view by October 10, 2010.
“The proposed standard product may be mandated for the insurers to offer in the market to meet the rural and social sector obligations,” IRDA said in a communique to all life and non-life insurance companies.
Under the scheme, each state would have two general insurers and two life insurers.
“The existing arrangements of the insurers with the Third Party Administrators (TPAs) and the network hospitals to ensure that cashless facility is made available in rural/semi-urban urban areas,” it said.
“The insurers should not be allowed to market any other product which offers either lower benefits for the premiums charged than in the standard product or higher premiumm which offers lower benefits than the standard product for the premium charged,” IRDA said.
The regulator has also tabled the premium to be paid by the insured for coverages ranging from Rs 100,000-1 million.
For a coverage of Rs 100,000, the premium (depending upon the age of the insured) would range from Rs 2,224-Rs 4,613, while for Rs 200,000, the premium would be from Rs 4,448-Rs 9,226.
Besides, for coverage up to Rs 1 million, premiums to be paid would be in the range of Rs 22,240-Rs 46,130.
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