IRDA bans universal life products
October 21st, 2010 - 11:09 pm ICT by IANSChennai, Oct 21 (IANS) In yet another policy holder-friendly move, the Insurance Regulatory and Development Authority (IRDA) Thursday banned the sale of universal life products from Oct 22, 2010.
The universal life product is a mix of unit linked insurance and traditional policies. Unlike unit linked insurance policy (ULIP) the fund value is not declared.
In an order issued Thursday under Section 14 (2) (B) of the IRDA Act, the regulator has said: “The Authority has received several 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.”
Citing the draft guidelines on Variable Insurance Products issued by it Thursday, the IRDA said that the guidelines “Â…will govern all so called Universal Life Insurance Products. Meanwhile, in order to ensure that the policy holders do not lock themselves in current Universal Life Products, it is hereby ordered that the insurers shall not sell any Universal Life Insurance policies from the close of business on 22nd October, 2010.”
The regulator’s move will affect life insurers like Max New York Life, Aviva Life, Reliance Life and Bharti Axa Life.
Industry officials told IANS that insurers have been passing on high commissions to distributors under universal life products and it needs to be regulated.
- More than 250 ULIPs sucked out of the market - Sep 02, 2010
- IRDA to contest SEBI order (With SEBI bans 14 insurance companies from selling ULIPs) - Apr 10, 2010
- IRDA asks life insurers to defy SEBI ban (Lead) - Apr 11, 2010
- IRDA move will kill variable insurance segment: Industry - Oct 23, 2010
- IRDA adopts tough standards for approving new ULIPs - Aug 25, 2010
- Ergo looking for partners to start life insurance business - Aug 26, 2010
- Scrapped insurance products bring actuaries in spotlight - Oct 24, 2010
- Life insurers asked to defy SEBI ban - Apr 11, 2010
- 'ULIPs have potential for life insurers despite curbs' - Nov 22, 2010
- Sixty ULIPs filed with IRDA for approval - Aug 20, 2010
- Day after truce, SEBI says order applies to new ULIPs - Apr 13, 2010
- For life insurers, Aug 31 will have 384 hours - Aug 20, 2010
- Government to look into insurance controversy - Apr 12, 2010
- Ordinance declares ULIPs life insurance product (Lead) - Jun 19, 2010
- Move to end regulatory turf war over insurace plans (Lead) - Apr 12, 2010
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