Approvals for the re-filed policies under the new regulations for the life insurance sector would continue in full swing only after the Member-Life at the Insurance Regulatory and Development Authority of India (IRDAI) is appointed.
While the regulations have been finalised, the refiling process has not yet begun in full swing.
Member-Life, IRDAI is responsible for the life insurance sector, its regulations and product approvals. The appointment process is in the last stage and two senior Life Insurance Corporation of India (LIC) officials are being considered, sources said. The post was vacated in May 2019 after Nilesh Sathe retired.
All IRDAI appointments have to be cleared by the appointments committee of the cabinet (ACC), headed by the Prime Minister. The process got delayed due to the general elections and formation of the new government under PM Narendra Modi.
With this, it is likely that the complete new set of products under the new regulations will be available over the course of the next few months. Life insurers had already submitted responses to the regulator and mostly welcomed the changes. Post this, the regulation was finalised.
In the draft norms in October 2018 (now approved), IRDAI stated that life insurance companies would be able to offer flexible policy tenures for certain products. IRDAI also said insurers could design term, credit life and micro-insurance products that have a range of policy tenures to choose from.
IRDAI had constituted a committee for reviewing product regulations in the life insurance sector. The regulator brought out the draft regulations based on the report and comments from stakeholders.
For non-linked insurance products, the revival period has been extended to five years from the current two years. Here, non-linked policies to acquire guaranteed surrender value after two years.
In unit-linked insurance products, after payment of premiums for the first five completed policy years, the policyholder may be given an option to decrease the premium by a maximum of 50 percent. Once the premiums are reduced, they cannot be increased subsequently.
In the pension product category, IRDAI has given the option for partial withdrawal for those linked to the equity markets. Also, when it comes to buying an annuity at the end of a pension product’s policy term, the policyholder has an option to choose from an open market. Currently, they are limited to buying an annuity product from the same insurer.