Insurers find IRDA’s Ulip policy hard to buy

The Insurance Regulatory & Development Authority (Irda) wants life insurance companies to become more friendly while selling unit-linked policies to customers. In a notice to all life insurers, Irda has asked insurers to list all charges to be paid and also the amount available for investment in each policy year. Additionally insurers must also give figures separately in a table on guaranteed benefits and non-guaranteed benefits for each policy year keeping in view the interest rates as specified by the Life Insurance Council, the representative body of life insurers in India. It is scheduled to be effective from February 1. Insurance companies, on the other hand, feel this latest Irda diktat would create complications and increase the transaction cost of selling policies. “This direction is going to make insurers’ life difficult. We, in any case, disclose all the details of risk policies before selling these to customers,” Kotak Mahindra Old Mutual Life Insurance managing director Gaurang Shah said. The Life Insurance Council is collating views of insurers and is planning to submit a memorandum to Irda to press its case. “The council has received views from each and every life insurer. Currently, we are in the process of compiling them following which we will send it to the regulator. However, insurers are in any case using two tables/illustrations. One at the sale point and the other is being sent with policy documents. Irda has asked insurers to modify the system of illustration and we would like the process to be transparent and proper,” said Life Insurance Council secretary general S V Mony. – www.economicstimes.com