IRDA guideline on ULIPs could have been much better: Bajaj

The new regulations could have been made much better. Both IRDA and government have ignored the repeated plea of the insurance companies, Bajaj said on the sidelines of a function at the Visesvaraya National Institute of Technology here last night. According to Bajaj, who also heads Bajaj Allianz Life Insurance, ULIPs with low-premium would no more be viable for insurers.

He said that Bajaj Auto has forayed into a new segment and would come up with four-wheeler in 2012. IRDA's new guidelines, which came into affect from September 1, aims to protect unit-linked insurance product holders from mis-selling by dealers and onerous commissions.

As per the new IRDA guidelines which came into effect from September 1, the commission paid to distributors and expenses charged by insurers will no longer be front-loaded and will be distributed over the lock-in period of the schemes, which has been raised to five years from three years earlier.

Furthermore, IRDA has fixed the floor on guaranteed returns from ULIP pension plans at 4.5 per cent, which will greatly benefit policyholders saving up for retirement.
Along with these changes, the regulator has fixed stringent minimum disclosure guidelines for insurers.

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