Life insurers seek more time to comply with IRDA norms

Life insurance companies have sought more time to comply with the new guidelines issued by the Insurance Regulatory and Development Authority on unit-linked insurance plans (ULIPs) on Monday.

According to a report, they hope the extra time will allow them to convince the regulator to drop some of the new rules.

The insurance regulator has asked the life insurers to follow the new guidelines from 1 September, which among other things require ULIPs-type pension plans to bundle health or life insurance and offer some guarantee on returns, as well as a cap on discontinuance charges.

''The executive committee of life insurance council has sought at least three month extension in implementing the proposals,'' The Times of India quoted an unnamed chief executive officer of a life insurance company who attended the meeting on Monday as saying.

The council has also requested IRDA to allow insurance companies to offer pension plans without guaranteed returns or with the attached health or life cover.
 
''As of now we have both the variants of pension products. Bundling a health or life cover will be restricting the choice of customers,'' said the head of a private sector life insurer, adding that a large section of people may be left out, since mandatory life or health cover would translate into hefty premiums. ''This will be financial exclusion.''

IRDA had earlier tightened the regulations for unit-linked insurance and pension plans. The new guidelines make it mandatory for insurance companies to bundle a life or health cover with pension plans. The regulator has also asked the life insurers to provide a guaranteed 4.5 per cent return on all pension products.