IRDAI Use And File Regime: Why Insurers Can Launch Products Without Pre-Approval Now

When the Insurance Regulatory and Development Authority of India (IRDAI) issued its circular on 1 June 2022, it quietly dismantled a decades-old bottleneck. Until that day, almost every general and health insurance product had to clear a "File and Use" gate — the insurer filed the design, then waited weeks (sometimes months) for the regulator's sign-off before a single policy could be sold. The June 2022 reform flipped the sequence: under the new "Use and File" regime, an insurer can launch a product first and file it with IRDAI afterwards. This article explains what that change means, how the approval mechanics now work, and where the consumer-protection guardrails sit.

The Rule / Product

The shift is a procedural one, governed by IRDAI under the powers it holds as India's insurance regulator (see the IRDAI glossary entry). The old "File and Use" procedure required prior regulatory clearance: an insurer drafted a product, submitted it, and could not market it until IRDAI returned an approval, which the regulator itself acknowledged could take several weeks of back-and-forth review. From 1 June 2022, IRDAI extended the "Use and File" procedure to the vast majority of general insurance and health insurance products, allowing them to go live immediately on the insurer's own certification.

The reform was not a free-for-all. Under the 2022 framework, an insurer wishing to use the new route must first put the product through its internal Product Management Committee (PMC), obtain a board-approved product-design and pricing policy, and secure a certification from its Appointed Actuary that the pricing is sustainable and compliant (the role of the actuary is central here). Only after these internal sign-offs can the product be sold, and the formal filing to IRDAI follows within the prescribed window after launch.

The legal backbone for this is IRDAI's mandate under the IRDA Act 1999 to regulate, promote and ensure orderly growth of the insurance business, which includes prescribing how products are filed and approved. The 1 June 2022 circular sits within that mandate and replaced the long-standing pre-clearance practice with a self-certification-plus-supervision model. Crucially, IRDAI carved out a small set of complex or higher-risk products that continue to require prior approval, so the Use and File default applies to the bulk of mainstream retail covers rather than to every conceivable product.

IRDAI did not stop with non-life products. Through subsequent circulars in June 2022, the regulator progressively extended the same "Use and File" philosophy to most life insurance products as well, so that the bulk of new life, health and general covers in the Indian market today reach customers without waiting on a pre-launch clearance. The structural logic is that the regulator moves from gatekeeping at the design stage to supervising conduct after the product is in the market.

Why It Matters

For consumers, the headline benefit is speed of innovation. Before June 2022, the prior-approval queue meant that a genuinely new idea — a usage-based motor cover, a modular health plan, or a niche cyber-risk policy — could sit in the regulatory pipeline while customer needs went unmet. By removing the pre-launch wait, IRDAI's 1 June 2022 circular lets insurers respond to demand in weeks rather than quarters, which widens the menu of covers an Indian buyer can choose from.

The trade-off is that accountability moves from the regulator's desk to the insurer's boardroom. Because IRDAI no longer vets each product before sale, the burden of getting the wording and pricing right now sits squarely with the insurer's PMC and its Appointed Actuary, both of whom certify compliance under the 2022 framework. For the buyer, this raises the importance of reading the policy document carefully, because there is no longer a pre-sale regulatory filter catching every problematic clause before it reaches the market.

IRDAI retained strong back-end powers to balance this. Under the Use and File regime, the regulator supervises products after launch and can direct an insurer to modify or withdraw a non-compliant product. The 14-day to 30-day free-look period — the window in which a policyholder can cancel a freshly bought policy and get a refund of premium less proportionate charges — also remains a key consumer safeguard, giving buyers their own personal "review gate" even when the regulator's pre-launch gate is gone.

There is also a market-structure dividend. By the time of the 1 June 2022 reform, India already had dozens of life and non-life insurers competing for the same customer, and a faster product cycle sharpens that competition. When a rival can copy a popular feature within weeks instead of waiting on a multi-month approval queue, insurers are pushed to differentiate on genuine value — wider underwriting appetite, fewer exclusions, or better claim service — rather than on a temporary first-mover monopoly granted by regulatory delay. This reform also dovetails with IRDAI's wider 2022-2024 push toward digital distribution, including the Bima Sugam marketplace, where a deeper product shelf only helps if products can launch quickly.

Worked Numbers

The mechanics are easiest to see through a timeline comparison. The figures below are illustrative of the process change introduced on 1 June 2022, not statistics about any single insurer.

To translate this into a buyer's perspective, consider how the speed change interacts with pricing. Suppose a 30-year-old non-smoker is comparing a newly launched term plan. Term premiums are driven by age, sum assured, tenure and mortality assumptions certified by the Appointed Actuary. A simple illustrative calculation shows the structure (run your own figures on our term insurance premium calculator):

The same arithmetic logic applies to health cover; you can model a family floater on our health insurance premium calculator. The point of the Use and File regime is not that premiums change overnight, but that the insurer — having certified the pricing through its Appointed Actuary on, say, a product launched in 2026 — carries direct responsibility for that figure being adequate and fair, with IRDAI checking it after the fact rather than before.

Pitfalls

Faster launches mean buyers must do more of their own diligence, because the wording traps that determine whether a claim is paid have not disappeared with the 2022 reform. The most common one is the room-rent sub-limit. If a health policy caps eligible room rent at, say, 1% of sum insured per day on a Rs 5 lakh cover (Rs 5,000 a day), and you occupy a room costing Rs 8,000, the insurer can proportionately reduce the entire bill — not just the room charge. Understand the mechanics through our explainers on room-rent capping and the broader idea of a sub-limit before you buy.

Co-payment clauses are the second trap. A 20% co-pay means that on a Rs 4 lakh claim, you personally bear Rs 80,000 regardless of your sum insured, and these clauses are common on senior-citizen and lower-premium plans. Because a Use-and-File product reaches the market on the insurer's own certification from June 2022 onwards, the co-pay percentage is disclosed only in the policy document, so it is worth reading the co-payment terms line by line rather than assuming a 0% structure.

Pre-existing disease (PED) waiting periods are the third. A policy may impose a waiting period of up to 36-48 months before conditions you had at the time of buying are covered, and a Use-and-File product can carry any compliant waiting structure the insurer certifies. If you declare diabetes diagnosed in 2024 and the plan has a 48-month PED clause, a related hospitalisation in 2026 can be declined on that basis — so always cross-check the pre-existing disease and waiting period terms, and never let an agent fill the proposal form for you.

Finally, do not skip the free-look period. Because there is no pre-launch regulatory vetting under the 2022 regime, the 14-day to 30-day free-look window is your single best opportunity to return a product whose wording you dislike, with a refund of premium less proportionate risk and stamp-duty charges. Reading the full policy within that window is now more important than it was before June 2022.

One further point of diligence concerns disease-specific sub-limits and "capping" on modern treatments. A Use-and-File health product launched in 2026 may cap cataract surgery at, say, Rs 40,000 per eye or limit certain modern treatments to a percentage of the sum insured, and because the regulator does not pre-vet the wording from June 2022 onwards, these caps surface only on a close reading of the policy schedule. Comparing the prospectus and the policy wording side by side, and confirming the figures against the insurer's customer information sheet, is the single most reliable way to avoid a nasty surprise at claim time.

FAQ

What is the difference between "File and Use" and "Use and File"?

Under the older File and Use procedure, an insurer had to file a product with IRDAI and obtain prior approval before selling it, a step that the regulator acknowledged could take weeks. Under the Use and File procedure introduced on 1 June 2022, the insurer can launch the product first — on the strength of its own board approval and Appointed Actuary certification — and file with IRDAI afterwards, within the prescribed window.

When did the Use and File regime start in India?

IRDAI introduced the Use and File procedure for the bulk of general and health insurance products through its circular dated 1 June 2022. Over the following weeks of June 2022, the regulator progressively extended the same approach to most life insurance products as well.

Does Use and File mean products are unregulated?

No. The 2022 framework keeps three internal controls — Product Management Committee approval, a board-approved design and pricing policy, and Appointed Actuary certification — and IRDAI retains the power to supervise products after launch and to direct an insurer to modify or withdraw any non-compliant product. The regulator's control shifts from pre-launch approval to post-launch supervision.

How does this affect my premium?

The Use and File regime does not directly raise or lower premiums; pricing is still set by the insurer's Appointed Actuary and must be sustainable and compliant. What changes is accountability: from June 2022, the insurer carries direct responsibility for the certified price, with IRDAI reviewing it after the product is in the market. You can model indicative premiums on our term and health calculators before buying.

Can IRDAI still withdraw a product after it is launched?

Yes. A central feature of the Use and File regime is post-launch supervision. If IRDAI finds a product non-compliant after it has gone on sale, the regulator can direct the insurer to modify the wording or withdraw the product, which preserves consumer protection even though there is no pre-launch clearance from June 2022 onwards.

What should I check before buying a Use-and-File product?

Read the policy document for room-rent sub-limits, co-payment percentages, pre-existing disease waiting periods (often 36-48 months) and any disease-specific sub-limits, because these are disclosed in the wording rather than vetted by IRDAI before sale. Use the 14-day to 30-day free-look period to return the policy if the terms do not suit you.

Does Use and File apply to life insurance too?

Yes, progressively. After the 1 June 2022 circular covering general and health products, IRDAI extended the Use and File philosophy to most life insurance products through further circulars in June 2022, so the majority of new life covers now also reach customers without a pre-launch clearance.