Team Adda247 and BankersAdda are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is IRDAI strengthens cover for homebuyers’ biggest risk.
IRDAI strengthens cover for homebuyers’ biggest risk
IRDAI has asked general insurance companies to launch new title insurance products for individual homeowners and allottees. The title is a legal term that is used in recognition of the true owner or owners of a property. The biggest risk to homeowners is his or her property being declared illegal by a competent court of the country but now it would be solved by IRDAI’s step.
Title insurance is a form of redressed insurance that safeguards a potential owner of a property against financial loss from defects in the title of the property. The title insurance cover should be retrospective in nature it means that it will not only cover future litigations but will also cover past defects if any. On September 08, 2021, IRDAI has issued the title insurance guidelines via a circular. Title Insurance in India is at its newborn (early) stage and IRDAI’s circular will help its acceptance in the country. Currently, this product is available only for Promoters/Developers in the Indian market but with this circular, it promotes to introduce a retail policy for allottee/individual buyer. The regulator has asked suggestions from the working group to provide help to promoters or developers to put legal defense against a title challenge and compensate home buyers in case of a defect.
As per IRDAI’s circular the general insurers can extend basic Title Insurance covers for legal liabilities of promoters/developers in case of any loss caused to allottees due to defective title of the property, protection to individual buyers for the purchased unit in projects and to alleviate easy marketability of these products.
IRDAI has suggested introducing a promoter legal expense (defense cost) policy, which will indemnify against legal defense costs only against suits challenging the Title of the project.
IRDAI: Insurance Regulatory and Development Authority
Chairperson: Subhash Chandra Khuntia