The Insurance Regulatory and Development Authority of India (IRDAI) earlier this year had brought in significant changes to regulations related to both non-linked life insurance products and ULIPs. The regulator had asked insurance companies to withdraw products and insurance riders that are not in agreement with the new product regulations, by November 30th this year. However, IRDAI has now extended the deadline to January 31, 2020.
The regulator said the extension on the timeline was made as requests were received from various life insurers and representations from the Life Insurance Council. The new extension in deadline to withdraw products and riders that are not in line with the new product regulation has opened doors for insurance companies, as they will have more time to get products out of the market.
Naval Goel, CEO, and Founder of PolicyX, said, “Now insurance companies have enough time to prepare the system and necessary training of personnel. Moreover, the regulator had said that the extension does not apply for plans already approved under ‘File and Use’ under the new guidelines.” The deadline of February 29, 2020 to refile or modify the existing products, however, will be applicable to products both under the linked and non-liked insurance segment.
According to the regulator, the new guidelines will, therefore, be applicable from February 1, 2020, instead of earlier December 1, 2019 deadline. Experts suggest people buying life insurance policies after the new guideline is applied will benefit.
The changes that were brought in by the regulator earlier this year were to make life insurance more favorable to customers. The new rules also offered essential benefits and flexibility to the existing policyholders. Benefits such as partial withdrawals from unit-linked pension policies and life cover, minimum guarantee on surrender, and revival of policies are some of the rules improvised for policyholders.
Goel from PolicyX adds, “It comes out as good news for policyholders as they will not face the sudden lack of plans to select from in the market. It will become easier for customers looking to invest in the desired products which are good enough for long-term investment as the new products might be rich in features, premium, and guaranteed returns will be lower.”