Convert ULIPs to variable insurance products: IRDA to life insurers
24 November 2010
The Insurance Regulatory and Development Authority (IRDA) has directed chief executive officers (CEOs) of all life insurance companies to rename the so-called 'universal life insurance products' (ULIP) to 'variable insurance products' (VIP) with immediate effect.
IRDA has also circulated draft guidelines on variable insurance products, which will govern all existing universal life insurance products.
The authority has also imposed a ban on selling any universal life insurance / policies from the close of business on 22 October 2010, so as to ensure that the policyholders do not lock themselves in current universal life products.
IRDA said it issued the new guidelines after verifying the various customer complaints on the sale practices of the insurers regarding universal life products.
"After examining the complaints, the authority is satisfied that the universal life products need a better regulatory framework for protecting policyholders' interest," IRDA said in a release.
As per the new guidelines: