In major relief to life insurance companies that did not have adequate products in their bouquet, the Insurance Regulatory and Development Authority (IRDA) has extended the deadline for phasing out old products in the traditional segment to December 31, 2013. The earlier deadline was October 1, 2013. Not extending the deadline would have meant limited new products for customers to choose from.
However, the sale of highest net asset value (NAV) products in ULIP ( unit-linked Insurance Plan) and index-linked products in the life insurance segment has been banned from October 1, 2013.
Mr. T. S. Vijayan, Chairman, IRDA, said in a circular that products with highest NAV guarantee and fund level guarantee and products for which benefits were linked to any external index (index-linked products) would have to be withdrawn from October 1, 2013.
“It is also clarified that all individual products filed after September 30, 2013, shall be considered for approval in due course along with all other products received,” he said in the circular.
Hence, old products will have to be completely phased out from January 1, 2014.
IRDA had brought out a new set of guidelines for life insurance products in February, 2013. While the minimum death benefit & surrender value was altered for traditional product customers who stayed invested in a policy for a longer period, in the case of ULIPS, insurers had to intimate customers about the changes in the yield of the Ulip every month. The rules had also banned the sale of highest NAV products on the grounds that these were not in the customer interest.
In Monday's circular, IRDA has asked insurers to submit within one week, the details of products withdrawn, in line with the guidelines. Further, insurers have been asked to submit a weekly statement with details of products launched and the products withdrawn in accordance with the guideline, by end of first week of October, 2013.
No comments:
Post a Comment