Guidelines for traditional life insurance products soon: IRDA
Hyderabad: The final guidelines for traditional life insurance products could be announced by the insurance regulator after a meeting on February 8, Insurance Regulatory and Development Authority Chairman J Hari Narayan said here Monday.
He said the insurance advisory committee had considered the guidelines in its last meeting and the same is expected to be placed before the IRDA.
"The Insurance advisory committee has considered these guidelines in its last meeting. As per the procedure it has to be placed before the authority", Narayan said.
He said the the guidelines are expected to be gazetted after the meeting of the authority on February 8, he told reporters on the sidelines of a function.
Narayan was the chief guest at the graduation ceremony of the first batch of Post Graduate Programme in Risk and General Insurance offered by Indian Institute of Risk management.
In June last year, the insurance regulator had circulated draft guidelines on the proposed changes in life insurance products.
It was proposed that the minimum sum assured should be higher by 10 times the annual premium or 0.5 times of the annual premium multiplied by the term of the policy for those who are below 45 years.
According to IRDA, insurers need to withdraw and re-file existing traditional group plans like term plans and endowment plans by March 31 and individual traditional plans by June 30 this year.
But insurers reportedly said that the proposed deadlines are practically difficult to implement now and would impact the industry growth negatively.
"My view is that there is no such thing as right time for improving practices. So I would say that opposite way. It is good idea to bring out new models when the industry is down.
"By and large Life Insurance companies are coming with new products in line with the regulations. The industry is fully aware," Narayan replied when asked about the industry?s reservation on the timing of implementation.
Replying to a query, the insurance watchdog chief said the assets under management by Indian insurance companies is expected to touch Rs 20 lakh crore by the end of March this year.
"Last year it was Rs 18 lakh crore. This (financial) year it is likely to be flat. Say about Rs 20 lakh crore this year," Hari Narayan said adding of this, non-life insurance companies would constitute about Rs 3-4 lakh crore.