New Norms for Life Insurance Products

Norms for LIC Products 

 

The Insurance Regulatory and Development Authority (IRDA) has informed that two regulations have been framed, namely, (i) Insurance Regulatory and Development Authority (Linked Insurance Products) Regulations 2013 dated 18.02.2013 and (ii) Insurance Regulatory and Development Authority (Non- Linked Insurance Products) Regulations 2013 dated 18.02.2013 to make life insurance products user friendly. 

 

The provisions of the regulations are helpful to the policyholders in the following manner :

 

• Product classification is defined to bring transparency. 

 

• Minimum death benefit is prescribed to ensure that the beneficiary will get a reasonable amount on death of policyholder. 

 

• The commission is linked to the premium payment term to encourage long-term products. 

 

• Minimum Guaranteed Surrender Value in respect of individual products and the surrender penalty in respect of fund based group products are prescribed to protect the interests of policyholders and to ensure reasonable benefits to policyholders on surrender. 

 

• The surrender penalty in respect of Fund based group products is restricted to give more return to policyholders. 

 

• The norms regarding disclosure to policyholder have been strengthened to help the policyholder make an informed decision. 

 

• Better yield to the customers of variable Insurance Products through specification of limits on reduction in yield. 

 

• To encourage revival of discontinued Unit linked policies revival period is enhanced beyond the lock-in period. 

 

IRDA has further informed that the existing products which are not compliant with the new regulations have to be modified before 30th June 2013 for Group products and before 30th September 2013 for Individual products. 

 

This was stated by Minister of State for Finance, Shri Namo Narain Meena, in written reply to a question in the Lok Sabha today. 

 

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All Insurance Companies are selling their policies online - IRDA

All Insurance Companies are selling their policies online - IRDA

Online Sale of Insurance Policies

Insurance Regulatory and Development Authority (IRDA) has informed that all Insurance Companies functioning in the country are selling their policies online except Agriculture Insurance Company of India Ltd. (AICIL), Export Credit and Guarantee Corporation (ECGC), L&T General Insurance, Raheja QBE General Insurance, SBI General Insurance and Shriram General Insurance.

IRDA has informed that the likely benefits of purchasing policies online are as under:-

i. Availability of Lower Premium rates due to reduced operational expenses o the company,

ii. Quick and hassle free purchase of the policies,

iii. Policyholder may take an informed decision by liking into the products available online,

iv. Renewal of the policy becomes easier,

v. In case of a claim event, intimation may be given in a faster way than otherwise.

The manner of settlement of claims are as per Terms and Conditions of the Policy issued by the insurance companies.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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