On October 3, 2019, The Insurance Regulatory and Development Authority of India (IRDAI) has constituted a 12-member working group (WG) chaired by T.L. Alamelu to review the product structure of title insurance, which covers any loss caused due to a defect in the ‘title’ of the property arising out of third-party challenges. WG will submit its report in 12 weeks’ time from the date of the order.
Key points:
i. Issues: Â The move comes after the backdrop of a less than intended response to title insurance products as the total number of title insurance policies sold is minimal, despite availability for the last one and a half years .
ii. About title insurance: It is an insurance to provide indemnity to developers and the subsequent home owners of the property against losses and risks related to defects in the title of the property. It even covers issues which are not discovered prior to the commencement date of the policy.
iii. RERA:Â The RERA act , 2016 ( Real Estate Regulation and Development) directs insurers to offer title insurance products with the objective to safeguard the interest of the owners, investors & lenders against defects in the title of the property caused by forgery, fraud, undue influence, duress.
iv. TOR: The terms of reference (TOR) of the working group are as under:
- The group is to examine legal and regulatory framework, study the structure, analyse the reasons for sluggish demand for title insurance products available in the Indian market and also recommend measures to spur the demand for the product.
- To develop a standard title insurance product suitable to Indian market and.
- To suggest augmentation of reinsurance capacity within the domestic market.
- To examine any other aspect relating to title insurance products in India.
About IRDAI:
Headquarters: Hyderabad, Telangana
Chairman: Subhash Chandra Khuntia