From April 1, all general insurers dealing in fire and allied-perils insurance business have to offer three standard products designed by Insurance Regulatory and Development Authority of India (IRDAI) covering the risks of dwellings and micro and small enterprises.
This follows the regulator issuing guidelines replacing the Standard Fire and Special Perils (SFSP) policy under in the erstwhile All India Fire Tariff (AIFT) 2001 with the three standard products.
The general insurers would have to mandatorily offer Bharat Griha Raksha, Bharat Sookshma Udyam Suraksha and Bharat Laghu Udyam Suraksha from April 1, according to the insurance regulator.
The SFSP is being replaced as part of the process of de-tariffing and bringing various aspects of fire and allied perils segment of the general insurance business out of the ambit of the AIFT 2001. The process began in 2006-07 and 2007-08 with the pricing aspect of products being removed from AIFT 2001.
From January 1, 2008, pricing was left to the insurers subject to the product filing guidelines issued by the regulator. The guidelines stipulated that for aspects other than pricing, namely policy terms and conditions, clauses and general regulations, the general insurance industry will continue to be guided by AIFT, 2001 until further notice.
“It has now been decided by the Authority to complete the process of de-tariffing for the risks of dwellings and micro level and small level enterprises with effect from April 1, 2021 wherein for these risks the AIFT 2001 shall stand de-notified from the effective date and replaced by relevant guidelines,” a release from IRDAI said.
Bharat Griha Raksha is for home building and contents and offers cover against a wide range of perils, including fire, natural catastrophes, damage due to riot, strike, acts of terrorism. Bharat Sookshma Udyam Suraksha is for enterprises where the total value at risk is upto ₹5 crore, while Bharat Laghu Udyam Suraksha is meant for enterprises where the total value at risk is from ₹5 crore to ₹50 crore.
