No plans to cap charges on traditional products: Irda

The regulator assures it will approve new Ulips on time.

The Insurance Regulatory and Development Authority (Irda) has said it has no plans to cap the charges levied by life insurance companies on traditional products. The regulator also assured it would approve new unit-linked insurance plans (Ulips) on time so that insurers could sell them from September 1 onwards. It further stressed it is not out to micro-manage the sector.

Irda Chairman J Hari Narayan, who was here on Friday to launch a health-cum-term assurance plan from Star Health and Allied Insurance Company Ltd and Shriram Life Insurance Company said: “Traditional products – term, endowment and money-back – are mature and well-structured. We don’t have plans to cap the charges on these.”

When asked about life insurers’ plans to offer commissions to corporate agents that are up to 80 per cent of premiums on traditional products, Narayan said: “If we come across any such misdeeds, we will handle that situation.” According to the regulator’s recent guidelines governing Ulips, the maximum first-year commission that can be paid to distributors is around 12 per cent.

Allaying fears that Irda is micro-managing the insurance sector with its proposed regulations governing individual agents, Narayan said: “We have just released an exposure draft on governing agents. We will take a call once we get the reactions.”

He reiterated that Irda would approve new Ulip products at least by August 27: “We will approve the products in time.” According to reports, over 60 Ulip products have been filed with Irda for approval in the last few days. The insurance regulator had said that life insurers have to design and file new products so that they conform to the new Ulip regulations that come into effect from September 1 onwards.