IRDA mulling cap on traditional products

After putting a cap on charges on unit- linked insurance plans (ULIPs) products, the insurance-sector regulator, Insurance Regulatory and Development Authority (IRDA) is mulling a similar move for traditional insurance products, a top official said.

"I would like to see what the experience in ULIP says. May be we will see after six or seven months and then will decide how it (cap on charges on traditional products) can be done or whether it should be done," IRDA Chairman, J Hari Narayan, told reporters on the sidelines of an insurance conference organised by FICCI here today.

IRDA, in July last year, had put up cap on the fees an insurance company can charge from a customer-buying ULIPs.

For a ULIP product with a tenor of upto 10 years duration, IRDA had capped the charges on yield at 300 basis points and for the products above 10 years duration, the charges can not exceed 225 basis points.

IRDA is also planning to come out with the disclosure norms in the next few days for insurance companies looking at listing.

"Disclosure norms would come in the next 10 days," Hari Narayan said.

"There should be adequate disclosures by the insurance companies for a certain period of time which would enable experts, analysts and investors to assess the performance of insurance companies before they invest in them," he said.