• Home
  • Article
  • Filing of Fire Insurance Products for Dwellings, Micro, and Small Businesses

FCS DEEPAK P. SINGH | May 15, 2022 | Views 54467

Filing of Fire Insurance Products for Dwellings, Micro, and Small Businesses

Filing of Fire Insurance Products for Dwellings, Micro, and Small Businesses

Ref.No.: IRDAI/NL/CIR/MISC/96/05/2022
Dated: 12th May 2022

Dear Friends,

The Authority, vide notification F.No.IRDAI/Non-life Insurance/5/171/2020 de-notified erstwhile All India Fire Tariff (AIFT) for certain risks. Further, it was notified that with effect from 1st April 2021, Fire and allied perils covers for the specified risks shall be subject to regulations and/or guidelines enunciated in this regard by the Authority.

Insurance regulator IRDAI on 12th May 2022 allowed general insurance companies to design new and customized products for dwellings, micro and small enterprises for fire and allied perils in its continuous endeavor to increase insurance penetration and provide a wider choice to policyholders.

This move will enable insurance companies to broaden the coverage already provided in the standard products by offering innovative add-ons or varying the existing provisions to meet the needs of the policyholders in terms of suitability and affordability.

This comes after the introduction of standard products in this segment, namely:

I) Bharat Griha Raksha,
II) Bharat Sookshma Udyam Suraksha and
III) Bharat Laghu Udyam Suraksha.

These standard products replaced the Standard Fire and Special Perils (SFSP) policy for the named risks and no product other than the standard products was permitted for Fire and allied risks.

Circular dated May 12, 2022, was issued in this regard and comes into effect from 1st June 2022;

1. After considering the increasing demand for new covers in the fire line of business, the Authority hereby permits general insurers to design and file alternative products covering fire and allied perils.

2. Such alternative products may be variations of the standard product and may include already approved add-ons as part of the base product or may delete an existing provision.

However, the definitions and wordings of terms used in the standard product shall be the reference point for those terms when used in the alternative products as well. Needless to add, the pricing of the products shall be commensurate to the risks involved.


a) Insure evolving fire insurance risks of Dwellings, Micro, and Small Businesses to increase insurance penetration.
b) identify protection gaps in the existing fire insurance products and address the changing needs of the market with due consideration to the policyholders’ interests in terms of suitability and affordability.
c) promote healthy and sustainable development of the fire insurance market with new and alternative products that provide wide options to policyholders in addition to standard products.


i) The standard policies in force shall not be canceled for the purpose of offering new covers.
ii) New products will be filed by using extant product filing guidelines.

IRDAI has also clarified that it does not mandate any minimum rate for premium setting by insurance and reinsurance companies. “It has come to the notice of IRDAI that policyholders are being led to believe that the Burning Cost released by Insurance Information Bureau of India (IIB) is ‘minimum mandated rate’. Industry Burning Cost is only a reference point to understand claims experience in fire perils across the industry. It is not to be construed as a minimum mandated rate laid down by IRDAI.

The insurance companies have also been advised to ensure that there is no misinformation to policyholders and other stakeholders regarding the same.

IMPACT: the IRDAI has de-notified the All India Fire Tariff (AIFT) for certain risks and has issued Guidelines for Standard Products for dwellings, Micro and Small Businesses. These products replaced Standard fire and Special Perils Products. The Circular dated 12th May 2022 allowed insurers to issue alternative products for dwellings, micro and Sam all businesses will improve insurance penetration and availability of standard products to the small houses and businesses throughout India. This has been done on the demand of policyholders, markets, and others.

DISCLAIMER: The article presented here is only for sharing information with the readers. The views expressed are personal. In case of necessity do consult with insurance advisors.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button

Join Membership

In case of Any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"


Leave a Reply