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The insurance firms were asked by the Insurance Regulatory and Development Authority (IRDA) to abstain from charging policyholders differential premium without its consent.
Meanwhile, insurers state a range within which the premium rates would differ keeping in mind the unfavorable risk factors. This was stated in the papers submitted to Irda before introducing any product.
IRDA said that it should be made sure that no premium quotation is provided that is beyond the range filed with Irda and also a rate which the underwriter and Appointed Actuary did not approve.
Moreover, IRDA asked the insurers to market their products keeping the terms and conditions that were approved by it in mind.
The insurance regulator has noticed that few insurers provide premium rates outside the range filed with Irda. They also offer discount in premiums and provide enhanced benefits on the product without charging any premiums.
The circular said that this is not a healthy practice which apart from attracting IRDA's penal action, it will also affect the financials of the insurer therefore affecting the interest of the policyholders and shareholders.
Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto."
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