IRDA’s deadline for re-filing life insurance products extended to Jan 2014

The Insurance Regulatory and Development Authority (IRDA) has extended the deadline for realigning all their existing products to the new regulatory guidelines to January 1, 2014. The insurers are required to re-file their products as the IRDA’s new guidelines prescribe a higher insurance cover plus other benefits such as a higher minimum surrender value and death benefit.
In a much needed relief to life insurance companies, the Insurance Regulatory and Development Authority (IRDA) has extended the deadline for realigning all their existing products to the new regulatory guidelines to January 1, 2014.

The earlier deadline was October 1, 2013.

The insurers are required to re-file their products as the IRDA’s new guidelines prescribe a higher insurance cover plus other benefits such as a higher minimum surrender value and death benefit.

Under the new guidelines, life insurance companies will not be allowed to offer guaranteed highest net asset value (NAV) products in the unit-linked segment and products linked to an external index from October 1 as they are prone to mis-selling.

In the case of unit-linked products (ULIPs) the regulations require, life insurers to inform customers about changes in the yield of the ULIP every month.

Life Insurance Council, the industry body for life insurers had earlier sought an extension of the deadline. If the deadline was not extended, life insurance companies would have been able to offer only limited number of products which may have lead to a slowdown in sales for them.

The existing policyholders for group policies will be given an option to switch over to the revised product under the new norms or continue with the old policy if a specific written consent is obtained by the group policyholder.

IRDA is granting priority wise approval to life insurance companies and has approved 350 products so far. The regulator will approve 150 products in the next couple of months. “With the three month extension, life insurance companies including state run Life Insurance Corporation will get all their products approved by December 31st as per IRDA.

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