Irda acts tough in clearing new Ulip plans

The Insurance Regulatory and Development Authority (Irda) is said to be going through the new unit-linked insurance plans (Ulips) filed for approval with a fine comb.
According to sources, Irda may not clear too many Ulip policies per insurer. “By September 1, we will ensure each insurer has at least three products to sell,” Irda chairman Hari Narayan said recently.

Insurance companies have filed some 72 new products with the Irda for approval. These products conform to the new Ulip guidelines and they will replace the existing portfolio of Ulip products, which expire on August 30.

Of the 23 private life insurers, most have filed for at least three new policies each. Seven companies are seeking approval for more than three products. Bulk of the products filed for approval are non-pension products.

On June 28, Irda introduced fresh rules, bringing in wholesome changes in the product.

Under the new norms, Ulips are going to get cheaper and more beneficial for investors as high charges on such policies have been lowered and capped and agent’s commissions have been distributed evenly throughout the tenure. However, the lock-in period of the policy gets longer to five years from existing three years.

Another norm stipulates minimum 4.5 per cent guaranteed return on pension Ulips, something he actuaries have been opposing.

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