IRDA seeks to increase ULIP lock-in period
07 Aug 2009
The Insurance Regulatory and Development Authority, India's insurance regulator, is planning to increase the lock-in period for unit-linked insurance policies (ULIPs) by two years to five years with a view to reducing ''mis-selling'' and early lapsation.
''We are discussing the measure of increasing the lock-in period to five years so as to reduce early lapsation of policies which financially affects life insurers,'' R Kannan, a member of IRDA, told reporters in Chennai today on the sidelines of a seminar organised by Asia Insurance Post.
Life insurers will not be able to recover their market and administrative costs if policies lapse early. ''We are waiting for the consensus from the industry on the issue,'' Kannan said.
The regulator will also be launching a customer portal in six months through which policyholders can contact their respective insurance companies and lodge claims. ''When a policyholder registers a claim through the portal, we would also get relevant data and monitor the settlement of claims,'' Kannan said.
On the non-life side, he said general insurers have reported an underwriting loss - premium income minus claims outgo - of Rs3,179 crore for last fiscal as against Rs.2,309 crore a year ago.He added that general insurers are not pricing their products properly, and they should shift to actuarial method of pricing.
Commenting on portability for health insurance, Kannan said IRDA is planning for long-term health insurance products that can be portable.
