Form No.60 for depositing above Rs.50,000/-(BY CASH) in LIC, those who are not having PAN CARD

LIC - THE KINGPIN

Now, Life Insurers can file only 5 products a year

Now, life insurers can file only 5 products a year

17-Apr-2014

Source : Business Standard

M Saraswathy,

The Insurance Regulatory Development Authority (Irda) has come out with a

new product planner rule by which an insurance company can file only five

products for approval a year. But, this has not gone down well with the

companies. According to them, this norm would impact the availability of

innovative products to consumers.

“We have already filed products under the new traditional product regime.

Since the basic products have been in place, this was the time to file newer

riders and innovative products from FY15. However, the product planner

rules do not encourage this,” said the chief actuary of a private life insurance

company.

In an attempt to reduce time taken for product approvals, Irda has asked life

insurers for a product planner before every financial year. The planner would

give an indication of the number of products an insurer proposes to file each

quarter.

Irda has said if the number of products exceeded five, the insurer should

furnish supporting market research, product-wise persistency for the 13th

month, 25th month and 37th month as on April 30 of the previous year.

At present, Irda follows the file-and-use method of application, wherein

insurers apply to obtain prior approval of the authority to introduce/modify

insurance products.

Beginning April 2014, insurers have been advised to file this planner, at least

45 days before the beginning of the next financial year, that is, before

February 15 of each year.

On an average, industry players file about 8-10 products and riders each

year, which are an addition to their existing product portfolio. With the cap

now at five, insurers are worried that the choice given to a customer might

be limited because insurers would not be able to file more than one product

in each category (pension, health, group, individual and others).

“It is still not clear whether riders will be a part of this five-per-year cap. This

can be restrictive, especially for players who were busy in getting their basic

products like pure term and endowment cleared first. For customers, while

there would be no immediate impact, going forward they would have fewer

products to choose from,” said a senior executive of a life insurance firm.

The senior vice-president of a bank-promoted insurance company said

though the decision might be useful in quicker product approvals in the long

run, implementing it this year would be an arduous task for insurers.

Insurance Details Report Page 1 of 2

http://magicgyan.com/content/information/Print.asp?InfoId=5134 19/04/2014

Print

“The blockbuster products are already out of the market and are replaced

with newer versions. While customers are still in the process of fully

understanding the changes, any limit on the number of products to be filed

could affect our books,” the executive said.

Though insurers have expressed their concerns to Irda, sources said there

had been no decision to postpone the plan. Apart from postponing its

implementation, insurers have also requested the regulator to increase the

cap to 10-12 products a year.

Insurance Details Report Page 2 of 2

--
Thanks to :
Mr.VINAY KUMAR MOHANTY  MA
CHAIRMAN INFORMATION TECHNOLOGY
(LIFE INSURANCE AGENTS FEDERATION OF INDIA)