IRDA bans sale of universal life insurance products

[MURUGAVEL]

Post the stand off with SEBI on ULIPs, IRDA has become more active in regulating insurance policies. Shortly after regulating the charges on ULIPs, IRDA has now banned the sale of Universal Life Insurance products (reportedly on account of the high charge structure) . BL reports that this move would affect Reliance Life, Max New York Life and Bharti AXA.

 

IRDA has also issued guidelines for the charge stucture for variable life policies

 

Private insurers have hitherto grown by aggressively selling the so called 'non traditional' - market linked policies that LIC was not very active in selling. And the fact was that the charges on these policies were considerably high (these charges supported the high selling and servicing cost of these products) . With IRDA clamping down on these charges, and LIC also getting active on the 'non traditional' space - while retaining its supremacy in the traditional space , it will be interesting to see how private players respond.

 

Thanks to Mr C.B.Bhave of SEBI , insurance customers now stand to benefit :)

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J.Murugavel
Bharathidasan Institute of Management
PB No 12, MHD Campus, BHEL Complex
Thiruchirapalli 620014
Hand phone: 93633 14015