On Wednesday, the Insurance Regulatory and Development Authority of India (IRDAI) proposed a standard personal accident product with common coverage and policy wordings across the industry, a move aimed at increasing penetration of the product.
"Every general and standalone health insurer, who has been issued a certificate of registration to transact general and/or health insurance business, shall mandatorily offer this product," said IRDAI's draft guidelines.
General and health insurers should offer the product from 1 April 2021.
The insurance market is having a wide variety of personal accident insurance products, the draft said adding that each product has unique features and the insuring public may find it a challenge to choose an appropriate product.
"Therefore, with the objective of having a standard product with common coverage and policy wordings across the industry, the Authority has decided to mandate all general and health insurers to offer the standard personal accident insurance product," said the draft.
The cover would offer protection against death, permanent disablement, or partial disablement due to accidents. The standard product would be offered with a policy term of one year. It would also cover expenses towards hospitalisation.
The draft, on which comments from stakeholders have been invited by 18 December, said the standard product should have the basic mandatory covers. The covers should be uniform across the market.
"Minimum sum insured shall be ₹2.5 lakh and a maximum sum insured shall be Rs 1 crore," the draft said. Beyond that, insurers can offer on their own and can use the same name for the product if all terms and conditions remain the same, it added.