JOIN USLife Insurance of India (LIC) has said it has asked insurance regulator Insurance Regulatory and Development Authority (Irda) for extending the deadline for withdrawing existing products that do not meet the new norms from October 1.
“We are awaiting approval from Irda. We have made this request in case approvals are not with us. I am sure that Irda is going to take a call on this and take a decision, which is in the larger interest of investors,” LIC Chairman S K Roy told reporters here.
According to the regulator, all the existing group products have to be aligned with the new rules before June 30, while individual products have time till September-end.
The new guideline for traditional life insurance will have products with more benefits for policyholders, improve transparency and curb mis-selling of the traditional products.
Under this, Irda has capped commissions, and provided for minimum sum assured and guaranteed surrender value on traditional products sold by life insurers.
The life insurance industry has been asking for extension of time as about 400 products have to be recalled and then re-introduced in line with new norms. Earlier, the Life Insurance Council gave a representation to Irda seeking extension "We are hopeful of a positive response," the Council’s Secretary General V Manickam said.To ensure that life insurance products are of longer duration, the new guideline has increased the minimum premium paying term of the policy to five years.