FM talks tough, tells insurers to stop mis-selling & keep schemes simpler
There has been a perceptible shift from unit-linked insurance plans towards traditional product as fund value of investors fell below the invested amounts in many cases due to choppy market conditions. Linked new business saw a significant drop of 67% year-on-year to R17,455 crore in 2011-12 compared with R52,739 crore in 2010-11 and non-linked new business premium showed a 32% year-on-year growth to R96,224 crore as on March 2012.
The decline in insurance premium contributed to the decline in the household financial savings to 22.3% of GDP in 2011-12 from 23.5% in the previous year even as the country's overall gross savings rate fell to 8-year low of 30.8% of GDP last fiscal from 34% in 2010-11.
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