www.i-secureconsulting.in : Following regulator - Insurance
07-MAR-2013 : Index-linked products, ULIPs to be considered same: IRDA
The Insurance Regulatory and Development Authority (IRDA) has published the traditional product guidelines called the ‘most ambitious project’ of the regulator in the gazette.
According to the guidelines, non-linked variable insurance products—also called index-linked products— should be treated equal to unit-linked products (ULIPs).
The limit for first year commissions would be 15% for the five-year term, 30% for 10 years and 35% for 12 years or more. However, no commission will be allowed for direct marketing, the guidelines mentioned.
The minimum guaranteed surrender value would be 30% of the total premiums paid less any survival benefits paid, if policy is surrendered in the second and third year. If surrendered in the fourth year, it would be 70% of the total premiums paid less any survival benefits already paid. If surrendered during the fifth to the seventh policy year, it would be 90% of total premiums paid, less any survival benefits already paid, the guidelines added.
The surrender value beyond the seventh year would need to be filed by the insurer under the File & Use for clearance.
Insurance companies have been given time till June 30, 2013 and September 30, 2013 to re-file their group and individual products respectively.
Source : IIFL
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